Tether returns to US market with launch of USAT stablecoin

[NEW YORK] Tether Holdings said that it has launched a US-focused stablecoin, as the world’s largest issuer of US dollar-pegged tokens prepares to return to crypto’s largest market.

The new token, known by its ticker USAT, was issued by Anchorage Digital Bank, according to a statement published on Tuesday (Jan 27). Cantor Fitzgerald, which already manages the reserves of Tether’s mainstay US$186 billion USDT stablecoin, will do the same for the new coin as its designated reserve custodian and preferred primary dealer.

Several crypto exchanges said that they had made USAT available for trading on Tuesday, including Bybit, Crypto.com and OKX.

Stablecoins are cryptocurrencies meant to maintain a steady value, typically pegged to the US dollar through reserves of cash or other assets. More than US$308 billion are in circulation today, with El Salvador-based Tether’s USDT making up about 60 per cent of that figure. They have been heralded by some as the future of digital money, potentially allowing for faster cross-border transactions at cheaper costs.

Legislation passed by US lawmakers last summer, known as the Genius Act, restricts what the reserves backing stablecoins can include. It also requires tokens whose circulation reaches above a certain size to be issued by a nationally chartered bank.

Tether first teased USAT with a glitzy New York launch event in September, appointing Bo Hines, a former White House crypto official, to lead the partnership effort from Charlotte, North Carolina. At the time, the company said it had planned to launch USAT by the end of 2025.

The move marks the return of Tether to the US market, having stated that it stopped allowing US customers to buy or redeem its tokens directly with the issuer in 2018. Its products remained accessible to investors through trading on crypto exchanges.

Tether paid US$41 million in penalties in 2021 to settle allegations by US authorities that it had misrepresented its reserves.

Much of the reserves supporting Tether’s original USDT stablecoin comes from short-term Treasuries and other cash equivalents. But Tether also relies on Bitcoin, secured loans and precious metals – assets not permitted under the Genius Act.

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The new token is designed to complement USDT by providing a token that’s regulated for use within the US, Anchorage said on Tuesday.

“USDT has proven for more than a decade that digital dollars can deliver trust, transparency, and utility at a global scale,” added Paolo Ardoino, Tether’s chief executive officer. “USAT extends that mission by providing a US-regulated product designed for the American market.” BLOOMBERG