GENIUS Act to Bar BitGo from Issuing Stablecoins in 2027
The GENIUS Act, set to come into force in January 2027, will prevent BitGo Technologies from issuing stablecoins. BitGo currently manages the USD1 stablecoin, but it falls short of future regulatory standards set by the federal reserve. Over 78% of USD1 tokens are held in offshore wallets, primarily linked to foreign exchanges.
BitGo Technologies is the current issuer of the USD1 stablecoin, responsible for its issuance and management. However, it does not meet the upcoming regulatory standards set by the federal reserve. When the act takes effect, BitGo will no longer be permitted to issue stablecoins.
The USD1 stablecoin is primarily held in offshore wallets, with over 78% of tokens residing in these accounts. These wallets are mostly associated with foreign exchanges, indicating a significant international presence. The institution managing the reserves of the USD1 stablecoin is World Liberty Financial, a private company with ties to the Trump family. It is not clear whether this institution is subject to the federal reserve's regulations.
In contrast to competitors like Circle, the last reserve update for USD1 was in July 2025, with no monthly reports since. NYDIG has expressed concerns about the lack of proper reserve reporting for the USD1 stablecoin, which may impact its act scores.
The GENIUS Act will bar BitGo from issuing stablecoins in 2027 due to regulatory non-compliance. The USD1 stablecoin's offshore holding and lack of regular reserve reporting have raised concerns, with NYDIG voicing its worries. The future of the USD1 stablecoin remains uncertain under the upcoming federal reserve regulations.
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