Tether Launches USAT Stablecoin
On Tuesday, Tether announced that its newly minted stablecoin, USAT, is now available for trading, marking a significant step towards regulatory compliance under the GENIUS Act, with Anchorage Digital serving as its issuer. This stablecoin, tailored for the United States marketplace, has already launched on several prominent cryptocurrency exchanges, including Kraken and Crypto.com. Anchorage Digital, recognized as a federally chartered digital asset bank, places USAT under the oversight of the U.S. Office of the Comptroller of the Currency (OCC).
Regulatory Compliance and Reserve Requirements
The OCC’s new regulatory framework, implemented last summer, enhances its authority to impose stringent reserve requirements on stablecoin issuers, necessitating that these assets be predominantly secured by cash or U.S. Treasury securities. This shift raises questions about Tether’s ability to adapt, especially since its traditional tethered stablecoin, USDT, is partly backed by Bitcoin and gold, as noted by financial institutions such as JPMorgan. These concerns suggest that Tether may need to modify its reserve strategies to align with the evolving regulatory landscape or potentially lose traction in the burgeoning market of dollar-pegged tokens.
Institutional Support and Future Plans
In a statement, Tether reported that its stablecoin, currently valued at $168 billion, is in the process of achieving compliance with the GENIUS Act. In the interim, the firm claims that USAT will fulfill the requirements of institutional investors. Additionally, it has appointed Cantor Fitzgerald as the custodian of USAT’s reserves and as its preferred primary dealer.
Amid a tumultuous 2023 for the cryptocurrency sector, U.S. Commerce Secretary Howard Lutnick has emerged as a notable advocate for Tether within the financial industry. At the time serving as the CEO of Cantor, Lutnick confirmed that the investment bank holds substantial amounts of U.S. Treasuries for Tether.
Leadership and Competitive Landscape
Following the launch of USAT in September, Tether selected Bo Hines, the former executive director of the White House crypto council, to lead its new U.S. operations. Tether’s CEO, Paolo Ardoino, indicated plans for full compliance with the GENIUS Act for USDT, a viewpoint echoed by competitors like Circle, who see their compliance efforts as advantageous under new legislation.
While Tether’s USDT enjoys substantial popularity overseas, the introduction of USAT highlights Tether’s aim to compete in markets where Circle’s USDC is prevalent. Anchorage Digital, which received a conditional national trust bank charter from the OCC in 2021, plans to launch its own stablecoin in collaboration with remittance giant Western Union.
Anchorage’s Vision for USAT
In a different release, Anchorage emphasized key features of the platform, including on-chain transparency, rigorous risk management protocols, and compliance at the bank-level. Nathan McCauley, co-founder and CEO of Anchorage, expressed confidence in USAT’s potential, stating,
“USAT reflects what’s possible when stablecoin issuance is done inside the U.S. banking system, under real supervision, with real accountability, at real scale.”
