Tether’s new stablecoin, USAT, could represent the first serious challenger to Circle’s (CRCL) USDC in the US market, analysts say, if it can win over institutions.
Launched in partnership with federal bank Anchorage Digital and Cantor Fitzgerald, USAT is Tether’s first attempt at creating a US-regulated dollar token aimed at institutional users.
Tether’s flagship stablecoin, the $186 billion USDT, dominates global cryptocurrency trading and emerging markets. But USAT enters a more crowded, compliance-driven landscape in the U.S., where Circle has long positioned USDC as the preferred choice for banks, fintechs and exchanges operating under U.S. oversight. USDC has a market capitalization of $72 billion, less than half of Tether’s USDT, but grew twice as fast last year.
“I think USAT is a threat to USDC, although the DNA of Tether and Circle is very different,” said Noelle Acheson, author of the newsletter Crypto Is Macro Now. While Circle has long positioned its token as the stablecoin of choice for regulated financial entities, USAT is clearly designed to compete in that same arena, he argued.
“USAT is designed to be institutional level, seeking to attract customers who would otherwise be happy using USDC,” he said.
Acheson pointed to several potential advantages: support from Anchorage, partnerships with traditional financial firms like Cantor Fitzgerald, which also services Tether’s USDT, and the potential ability to leverage Tether’s global network by converting with USDT.
He also noted that the involvement of former White House official Bo Hines in the project may ease concerns about Tether’s long-criticized reserve practices. “That could help institutions overcome their reluctance,” he said.
Nicholas Roberts-Huntley, CEO of Blueprint Finance, argued that Tether’s entry into the United States underscores that “the demand for regulated dollar tokens among banks and fintechs is real” after the stablecoin-focused GENIUS Act became law. It also shows that the stablecoin market is “moving from size and utility to differential regulatory positioning and institutional trust.”
“USDC has operated without a credible domestic competitor, as other participants lacked the scale, distribution or regulatory profile to challenge its position,” he said. “The launch of USAT could change that.”
ClearStreet analyst Owen Lau took a more cautious view.
“It is too early to evaluate this point,” he said. “But I think it represents a risk, but a manageable one for CRCL/USDC.”
It could also carry risks for Tether, as the new token erodes USDT’s existing dominance. “There may even be a risk of cannibalization,” he said.
