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Tether has launched a dedicated United States-focused stablecoin, USAT, in a strategic bid to capture institutional market share and challenge Circle’s USDC on its home turf. By partnering with Anchorage Digital Bank for issuance, the world’s largest stablecoin operator is attempting to bifurcate its business model: maintaining the offshore dominance of USDT while introducing a fully compliant, onshore product regulated under the new federal "Genius Act."
Key Points
- New Product Launch: Tether introduced USAT, a US-domiciled stablecoin issued by the federally chartered Anchorage Digital Bank, distinct from its offshore USDT token.
- Regulatory Pivot: Unlike USDT, USAT is designed specifically to comply with the "Genius Act," featuring 1:1 backing with liquid assets and strict monthly disclosure requirements.
- Market Dominance: As of February 2026, Tether’s USDT retains a massive $185 billion market cap, significantly outpacing Circle’s USDC, which stands at approximately $71 billion.
- Gold Strategy: Tether has accumulated approximately 140 tons of physical gold—valued at over $17 billion—signaling a shift toward becoming a broader collateral manager and commodities trader.
The USAT Strategy: Compliance as a Product
For years, Tether’s USDT has served as the default digital dollar for global crypto trading, leveraging its offshore status to facilitate rapid cross-border value transfer. However, this status precluded deep integration with the regulated US banking sector. The launch of USAT marks a definitive shift in strategy. Rather than forcing USDT into a regulatory framework it was never designed for, Tether has opted to build a separate, compliant infrastructure from the ground up.
USAT is issued through Anchorage Digital Bank, which operates under the supervision of the Office of the Comptroller of the Currency (OCC). This structure ensures the token meets the stringent requirements of the Genius Act, the federal legislation governing stablecoin issuance. These rules mandate 1:1 backing with liquid assets such as US dollars or short-term Treasury bills, along with rigorous public disclosures regarding reserve composition.
Paolo Ardoino, CEO of Tether, announced the initiative alongside the appointment of Bo Hines, a former White House official, to lead the USAT division. By isolating the US risk and compliance requirements within a federally regulated entity, Tether aims to neutralize the compliance advantage long held by its primary rival, Circle.
Market Dynamics: Tether vs. Circle
The introduction of USAT comes at a volatile time for the broader cryptocurrency market. Following a downturn beginning in mid-January 2026, the total stablecoin market cap has retracted from its peak. Data indicates that while both major issuers have felt pressure, Circle’s USDC has seen a sharper decline relative to Tether.
Current market figures paint a stark contrast in scale:
- Tether (USDT): $185 billion market capitalization (down 0.9% from all-time highs).
- Circle (USDC): $71 billion market capitalization (down 6.5% since mid-January).
Despite Tether's overwhelming lead in supply, Circle remains dominant in transaction volume and settlement usage, processing $18.3 trillion in 2025 compared to Tether’s $13.3 trillion. This discrepancy highlights the diverging utility of the two assets: USDT acts as a store of value and trading pair liquidity, while USDC is utilized heavily for high-frequency settlements and regulated payments.
With USAT, Tether is directly targeting the institutional demand that Visa and other major financial entities have previously directed toward USDC. If Tether can offer a product that satisfies US regulators while leveraging its massive global brand liquidity, Circle’s primary "compliance moat" could erode.
The Pivot to Gold and Commodities
Beyond the battle for digital dollars, Tether is aggressively diversifying its balance sheet and business operations, specifically targeting the $34 trillion gold market. According to recent collateral reports, Tether holds approximately $192 billion in reserves, with assets exceeding liabilities by $6.3 billion.
A significant portion of this excess capital has been directed toward physical gold. Reports indicate the company now holds nearly 140 tons of the precious metal in Switzerland, valued at over $17.45 billion. This accumulation places Tether among the largest non-sovereign holders of gold globally.
"We want gold to represent between 10 to 15% of our portfolio over the long term," stated Paolo Ardoino, Tether CEO, in comments to Reuters.
This move is not merely for passive reserve management. Tether is actively entering the commodities trading space, having hired senior traders from HSBC and extended nearly $1.5 billion in loans to commodity trading firms. By financing the supply chain—from mining to refining—Tether is positioning itself as a major player in global trade finance, moving well beyond its roots as a pure-play cryptocurrency issuer.
Implications and Risks
Tether’s expansion into energy production, Bitcoin mining, and tech investments (such as a stake in video platform Rumble and robotics firm NORA) suggests a conglomerate-style ambition. However, this diversification brings complex risks. Credit rating agencies like S&P Global have previously flagged Tether’s exposure to volatile assets like Bitcoin and gold as a stability concern for a stablecoin issuer.
The bifurcation of its product line into USAT (regulated) and USDT (offshore) also presents a branding paradox. By explicitly marketing USAT as the safe, compliant option, Tether implicitly acknowledges the regulatory opacity of USDT. Whether the market will view these as complementary products or if the existence of USAT will cannibalize confidence in USDT remains a critical uncertainty.
As the regulatory landscape in Asia and Europe tightens—with Hong Kong and Japan establishing strict issuance frameworks—Tether’s ability to maintain a global footprint while appeasing US regulators with a segregated product will be the defining test of its dominance in 2026.
