USAT: Tether’s token built for the United States
Tether’s strategy across the United States and global markets
In January 2026, Tether added USAT, a second dollar-pegged stablecoin, alongside USDT. USAT was designed specifically for the US market and built to operate within the regulatory framework introduced by the GENIUS Act. The token is issued by Anchorage Digital Bank, while Cantor Fitzgerald, a US financial firm and long-standing Tether partner, acts as custodian of the reserves and as the primary intermediary for the management of US Treasury securities.
The launch of USAT is not merely an extension of Tether’s offering, but marks the separation of two products intended for different contexts. USAT enables the group to establish a presence in the US financial system through locally regulated infrastructure. USDT, with a market capitalisation exceeding $180 billion, remains primarily focused on international markets, where stablecoins broaden the circulation of the dollar and are used for cross-border payments, remittances and in economies where direct access to the US currency remains limited.
The new US regulatory framework
Signed into law on 18 July 2025, the GENIUS Act is the first US federal law to provide a comprehensive regulatory framework for payment stablecoins. The legislation establishes which entities may issue them, how reserves must be managed and what safeguards must be provided to users.
Its central principle is full backing with liquid, low-risk assets. Issuers must guarantee redemption at par, publish periodic information on the composition of their reserves and comply with prudential, anti-money laundering and control requirements. They are also prohibited from paying interest or returns merely for holding or using a stablecoin, thereby keeping these instruments distinct from deposits and investment products. Issuance is restricted to banks and operators authorised at the federal or state level, while the distribution of foreign stablecoins is subject to specific conditions.
The ability to invest reserves in short-term US Treasury securities also links the growth of stablecoins to demand for US government debt. This is not merely an indirect effect: the US Department of the Treasury has explicitly identified these instruments as a new channel for the international circulation of the dollar and a source of structural demand for Treasuries.
The change is substantial. Before the legislation, confidence in a stablecoin depended primarily on the issuer’s reputation, the quality of its published attestations and its demonstrated ability to meet redemption requests. In the new US market, the institutional architecture supporting the token also matters: who issues it, who holds the assets and which authority exercises supervision.
The decision to create a new token
USDT was created as an international product within an architecture developed outside the US banking system. Bringing it within the new federal framework would have required far more than adjusting its documentation or revising certain internal procedures. Tether would have had to change the issuing entity, the supervisory framework, the custody of the assets, the redemption arrangements and its relationships with US authorities.
The reserve portfolio would also have required revision because, alongside US Treasury securities and other liquid assets, it includes bitcoin, precious metals, secured loans and other investments. Tether would therefore have had to fundamentally alter the structure of a global token worth more than $180 billion, with potential consequences for its management and international use.
The company instead chose to retain the configuration that supported USDT’s global expansion and create a separate product designed from the outset to comply with the requirements of the US market. USAT is therefore issued by Anchorage Digital Bank, while Cantor Fitzgerald holds the reserves and Tether provides the brand, technology and distribution capabilities. The new token was not created to replace USDT, but to allow the group to operate in the United States without transforming an established international infrastructure.
Tether’s response to MiCAR
Around a year and a half earlier, similar regulatory pressure had produced the opposite outcome in Europe. The provisions of the Markets in Crypto-Assets Regulation applicable to stablecoins entered into force on 30 June 2024, requiring issuers of electronic money tokens to maintain full reserves, with at least 30% of the funds received deposited in segregated accounts with credit institutions. For tokens classified as significant, the proportion rises to 60%. Tether chose not to adapt USDT to the new European framework and, unlike what it would later do in the United States, did not create a token specifically designed for that market. It therefore did not apply for authorisation under MiCAR, and USDT was progressively removed from platforms authorised to operate in the European Union.
The decision reflects both economic and prudential considerations. Tether generates a large proportion of its revenue by investing its reserves in US Treasury securities and other interest-bearing assets. Holding up to 60% of those reserves in bank deposits would have significantly reduced the profitability of the assets backing USDT. The company has also challenged the European approach from a risk-management perspective, arguing that concentrating such a large proportion of the reserves with commercial banks exposes them to the counterparty risk of those institutions, whereas short-term government securities can be held according to principles of greater liquidity and diversification.
The comparison with the United States therefore provides a clearer view of the group’s strategy. Tether invested in the creation of USAT for the US market because exclusion from the world’s leading financial system would have carried a substantial cost in terms of legitimacy and institutional access. In Europe, by contrast, it accepted the consequences of non-compliance, considering the market less important than the impact that adaptation would have had on USDT’s structure and profitability. Similar regulatory pressures thus produced opposite responses, reflecting the different strategic weight assigned to the two markets.
Competition in the US market
Around six months after its launch, USAT remains relatively small. At the end of July, its market capitalisation stood at approximately $185 million, just over one-thousandth of USDT’s. This does not necessarily indicate limited commitment on Tether’s part, but illustrates how difficult it is to build liquidity and distribution in a market already served by established operators.
Its main competitor is Circle’s USDC, which did not need to be redesigned from scratch for the US market because its existing architecture was already close to the requirements later codified by the GENIUS Act. Its reserves consist of cash and short-term US Treasury securities and are held predominantly in the Circle Reserve Fund, managed by BlackRock and held in custody by BNY Mellon. Circle also operated through a US issuer that was already subject to US licensing requirements and published periodic attestations on its reserve assets. The new federal framework required further institutional steps, but the company was able to adapt infrastructure that was already substantially compatible.
Competition is not limited to USDC. PYUSD benefits from PayPal’s distribution capabilities and is issued by Paxos, a regulated entity that publishes monthly reserve reports. RLUSD, meanwhile, is backed by Ripple, primarily targets institutional clients and is issued by a trust company supervised by the New York State Department of Financial Services. Although both remain much smaller than USDC, they exceed USAT in market capitalisation and benefit from established resources, infrastructure and commercial relationships. Tether’s challenge will therefore not simply be to ensure USAT’s compliance, but to turn it into infrastructure that is actually used by the US market.
The real battleground for stablecoins
USAT’s still limited results do not diminish the strategic importance of the US market for Tether. The United States is where the sector’s institutional and regulatory balance is largely determined, and maintaining a local presence enables the group to participate directly in this evolution, strengthen its relationships with the financial system and contribute to discussions with US authorities. Tether would have struggled to establish such a position by relying exclusively on USDT, which was created and developed outside the US regulatory perimeter.
The greatest economic and infrastructural opportunities, however, lie outside the United States. In the US market, the dollar is already readily accessible and supported by extensive banking and payment infrastructure. In this environment, a stablecoin can make transfers faster, programmable and continuously available, but it operates within an already developed system. In many other economies, by contrast, it can provide access to the dollar itself, offer a means of saving in a more stable currency, reduce friction in remittances and simplify international payments that still depend on chains of correspondent banks and slow, costly settlement processes.
It is in these markets that USDT has built its advantage. The token performs a function similar to that of a blockchain-based dollar account, without requiring a relationship with a US bank. For people living in economies characterised by high inflation or a weak currency, it can serve as a store of value. For those sending remittances or settling international transactions, it can reduce time, costs and dependence on traditional intermediaries.
The spread of stablecoins also helps reinforce the international role of the US currency. The tokens circulate globally, while issuers’ reserves remain invested predominantly in dollar-denominated assets, including US Treasury securities. This creates a private channel through which the US currency reaches users and businesses that do not have direct access to the US banking system. USAT can consolidate Tether’s institutional presence in the United States, but USDT performs the broader function of bringing the dollar to markets where demand is high and banking supply remains insufficient.
Conclusions
The creation of USAT reflects Tether’s decision to separate the US market from its global infrastructure. Rather than fundamentally altering a token worth more than $180 billion, the group created a product dedicated to the new federal rules while retaining USDT within the architecture that supported its international expansion. In Europe, by contrast, it accepted the consequences of non-compliance with MiCAR, considering it uneconomical to alter the token’s structure and profitability. The two decisions reflect the different strategic weight assigned to the US and European markets.
Access to the US regulatory framework, however, does not in itself guarantee commercial success. USAT is entering a market already served by larger stablecoins integrated into established financial ecosystems, and it must therefore evolve from a regulatory foothold into infrastructure that is actually used by banks, businesses and payment platforms. The strength of the Tether brand may support its expansion, but it cannot replace the liquidity, distribution and network effects that the new token has yet to build.
While the United States remains crucial to the institutional legitimacy of stablecoins, their deeper economic function emerges primarily beyond US borders. These instruments can have their greatest impact in markets where access to the dollar is limited, payment systems are inefficient and remittances remain expensive. USAT is the digital dollar built by Tether to operate in the United States; USDT remains the instrument through which the group aims to extend the global circulation of the US currency.
