Mobile Payment Network News: Tether recently announced that it will launch a new US dollar stablecoin, USAT (USA₮), by the end of 2025. Unlike the currently widely circulated USDT, Tether stated that USAT will comply with the relevant provisions of the GENIUS Act passed in July of this year and use this as the issuance framework. Tether's USDT is the world's largest stablecoin, pegged to the US dollar, with a circulation of approximately $170 billion and nearly 500 million users. While its reserves are primarily composed of cash equivalents such as short-term Treasury bonds, Tether also uses a variety of assets, including Bitcoin, collateralized loans, and precious metals, to back USDT. None of these meet US regulatory requirements, so it had to create a separate stablecoin to obtain approval in the United States. How is USAT different from USDT? According to Tether, USAT will be issued in accordance with the GENIUS Act, with reserves 100% in US dollar cash and short-term Treasury bonds, and will no longer include crypto assets, commercial paper, or non-standard collateral. Its issuer will be Anchorage Digital Bank, a regulated institution with a national trust bank license; its reserve assets will be held in custody by Cantor Fitzgerald, and will be subject to regular disclosures and audits as required by the act. This means that USAT will attempt to open the door to the US market with an unprecedented compliance posture. For the familiar USDT, this move isn't a rebranding, but rather a dual-track approach. USDT will continue to circulate, but it remains a foreign-issued USD stablecoin and a staple of exchanges and international markets. USAT, on the other hand, is designed specifically for US residents, adheres to US regulations, and is positioned as a "compliant version." In other words, Tether is attempting to create two stablecoin systems under the same brand, catering to the distinct needs of the international and domestic markets. The strategic intent behind this is clear: the US is the world's largest capital market and a highly stringent regulatory environment. The launch of USAT represents Tether's proactive regulatory "testing," addressing long-standing questions about its transparency and countering US-based competitors like USDC. As soon as the news broke, considerable discussion erupted within the industry. Some viewed the creation of USAT as evidence of Tether's formal concession to regulators and a necessary strategy for maintaining its market dominance. Others questioned whether Tether could maintain its "high-speed and flexible" operating model under the highly stringent US regulatory environment. Mobile Payment Network, in its view, viewed this "dual-track" approach as a classic regulatory arbitrage strategy: using one framework to address emerging markets while using another to legally enter heavily regulated markets. After all, with the stablecoin market increasingly focused on compliance, Tether must adopt a more "clean" stablecoin image if it wants to thrive. Tether's non-compliant image Despite its dominance in the cryptocurrency market, Tether, the world's largest stablecoin issuer, has faced controversy due to its long-standing compliance issues. In 2019, the New York Attorney General's Office launched an investigation into Tether and its sister company, Bitfinex, alleging they concealed an $850 million funding gap through complex transactions. The case was ultimately settled for $18.5 million, but Tether was banned from doing business with New York residents.
Later, Bitfinex cooperated with Crypto Capital, a payment processor without a contract, which resulted in $850 million in funds being seized by multiple governments, exposing its chaotic fund management.
In 2021, the U.S. Commodity Futures Trading Commission (CFTC) took action against Tether again, finding that it had misleading disclosures about its reserves and issuing a $41 million fine.
In 2025, the SEC accused Tether of failing to disclose changes in reserves for the additional issuance of $1 billion in USDT in accordance with the law, suspected of violating the Securities Act, and could face fines of over $4 billion. These lawsuits have all but stigmatized Tether as non-compliant. Tether has long claimed that "each USDT is backed by $1 in reserves," but investigations reveal that its reserves are lumped with commercial paper, loans, and other non-cash assets. This might be acceptable in the volatile crypto market, but it falls far short of US regulatory standards for "compliant stablecoins." Transparency and auditability are the bottom line, and Tether clearly fails to meet them. Consequently, over the past few years, Tether has strategically retreated and gradually faded out of the US, focusing instead on cross-border capital flows in Asia, high-inflation countries in Latin America, and trade markets in the Middle East. Since leaving the US market, Tether has thrived in the global gray market, with its market share at one point exceeding 70%.
The Market Landscape After Compliance
It is reported that, in addition to the focus on regulation and transparency, Tether will establish a new company specifically for USAT, located in Charlotte, North Carolina, and has invited Bo Hines, former Executive Director of the White House Digital Asset Committee, to serve as CEO. Hines' resume spans policy, law, and capital markets, and his appointment is seen as Tether sending a "signal of compliance" to Washington.
Bo Hines stated, "Our expansion will grow exponentially over the next 12 to 24 months." He emphasized that the launch of USAT is not only about complying with regulations, but also about strengthening the trust foundation of the US dollar in the digital asset space. It's worth noting that USAT may reshape the US stablecoin industry. Its proposed standards (100% Treasury reserves + federal custody + monthly audits) are likely to become the universal threshold for a new generation of compliant stablecoins. In the future, USDC and PYUSD will be forced to follow suit. However, USAT's success in the already beleaguered US stablecoin market will be challenging. First, compliance costs will rise significantly. For Tether, accustomed to operating efficiently overseas, establishing a compliance structure that meets US standards, hiring legal counsel, and undergoing regular audits are all heavy burdens. Secondly, the competitive landscape is changing. Circle's USDC has been deeply rooted in the US for many years and enjoys extensive institutional partnerships. PayPal's PYUSD is rapidly expanding thanks to its payment network. If the Trump-affiliated USD1 stablecoin launches in the future, it may even capitalize on its political influence to seize market share. Compared to these competitors, Tether has no inherent advantages. Furthermore, rebuilding trust will take time. Years of "non-compliant" reputations won't be erased overnight. Even if Tether provides greater transparency on USAT, regulators and the market will remain cautious. And the most uncertain issue is the US policy environment itself. While the GENIUS Act provides a framework, Congress and regulators remain divided on cryptocurrency, and new restrictions or changes may emerge in the future. Can Tether truly become a dominant player in the US market, or will it be suppressed by USDC and PYUSD? Will gray and compliant dollars coexist in the long term, or will they eventually merge? Will stablecoins gradually evolve into an on-chain "Treasury bond market," further entrenching the dollar's global dominance? These questions remain unanswered. The emergence of USAT may mark a new phase in the stablecoin market: a gradual shift from "decentralized and flexible issuance" to "compliant and transparent regulation." For Tether, this presents both a challenge and an opportunity. With compliance becoming a new competitive barrier, the stablecoin landscape may be undergoing a profound reshuffle.
Miyuki
Weatherly
Weiliang
Anais