Tether Launches USAT, a Compliant Stablecoin for the US: A Competitive Rival to Circle?

On September 12, Tether announced the launch of USAT, a new stablecoin designed specifically for the US market and fully compliant with the US dollar. The company also appointed Bo Hines as CEO of Tether USAT. In the cryptocurrency sector, Tether's USDT has a market capitalization exceeding $170 billion and is widely used in transactions, cross-border payments, and DeFi applications. Tether is projected to generate profits exceeding $13 billion in 2024 and approximately $5.7 billion in the first half of 2025. Q2 net profits reached a record $4.9 billion, primarily driven by US Treasury yields and reserve appreciation. According to defiLlama data, as of September 14th, the total stablecoin market capitalization was approximately $289.234 billion, of which USDT accounted for 58.96%, dominating the market. However, with the increasingly stringent US regulatory environment, Tether faces compliance pressure. Tether's launch of the new stablecoin, USAT, is seen as a strategic move to enter the US market. Tether's decision was not a sudden decision, but a response to global regulatory trends. Since 2022, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have stepped up their oversight of stablecoins. USDT, a non-U.S.-issued product, has been embroiled in numerous controversies, including issues with reserve transparency and anti-money laundering compliance. Tether, headquartered in the British Virgin Islands, is a globally circulated stablecoin, but its use in the United States is restricted, with some exchanges and institutions reluctant to directly support non-compliant assets. The launch of USAT aims to fill this gap, providing a stablecoin option that complies with U.S. legal frameworks. USAT will be pegged 1:1 to the U.S. dollar and backed by Tether's reserves, which include highly liquid assets such as cash and U.S. Treasury bonds. The core advantage of USAT lies in its U.S. compliance. According to Tether's official statement, the stablecoin will be issued and managed by a newly established U.S. subsidiary and is expected to launch before the end of 2025, initially targeting U.S. residents, businesses, and institutions. Unlike USDT, USAT will strictly comply with the Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) regulations and support Know Your Customer (KYC) verification. Furthermore, the USAT official website states that USAT is not legal tender and is not issued, backed, approved, or guaranteed by the U.S. government. USAT is not insured by the Federal Deposit Insurance Corporation (FDIC), the Securities Investor Protection Corporation (SIPC), or any other government agency. Notably, Tether appointed Bo Hines as CEO of the new business. Bo Hines is a veteran in politics and business, having served as an advisor to former President Donald Trump and running for a congressional seat in North Carolina in 2022. He is known for his conservative stance, particularly on cryptocurrency regulation and innovation policies. Hines' joining is seen as a sign that Tether is wooing influence in US politics. Hines revealed that the company's new US headquarters will be located in Charlotte, North Carolina. From a market perspective, the launch of USAT could reshape the US stablecoin landscape. Currently, USDT dominates global trading volume, but in the US, Circle's USDC has taken a lead due to its regulatory compliance advantages. USDC has a market capitalization of approximately $73.1 billion and primarily serves US institutions, such as Visa and Mastercard, which have integrated it into their payment systems. The emergence of USAT will directly challenge USDC's dominance, particularly in enterprise applications. Tether claims that USAT will support lower transaction fees and higher liquidity, making it suitable for supply chain finance, real estate transactions, and cross-border remittances. For example, a US exporter could use USAT to instantly settle overseas orders, avoiding the high fees and delays of traditional banks. This is particularly attractive given the current global economic uncertainty.