Tether’s new stablecoin, USAT, could pose the first serious challenge to Circle K (CRCL) USDC in the US market – if it can win over institutions, analysts say.
Launched in partnership with federally chartered bank Anchorage Digital and Cantor Fitzgerald, USAT is Tether’s first attempt at a US-regulated dollar token for institutional users.
Tether’s flagship stablecoin, the $186 billion USDT, dominates global crypto trading and emerging markets. But USAT enters a more crowded and compliance-driven field in the US, where Circle has long positioned USDC as the preferred choice for banks, fintechs and exchanges operating under US oversight. USDC has a market capitalization of $72 billion, less than half that of Tether’s USDT, but it grew twice as fast last year.
“I believe USAT is a threat to USDC, even though Tether and Circle have very different DNA,” said Noel Acheson, author of the Crypto Is Macro Now newsletter. He argued that while Circle has long positioned its token as the preferred stablecoin for regulated financial institutions, USAT is clearly created to compete in the same arena.
“USAT is designed to be institutional-grade, with the aim of attracting customers who would otherwise be happy using USDC,” he said.
Acheson pointed to several potential advantages: backing from Anchorage, partnerships with traditional finance firms like Cantor Fitzgerald, which also services Tether’s USDT, and the potential ability to tap into Tether’s global network through conversion with USDT.
He also said the involvement of former White House official Bo Hynes in the project could ease concerns about Tether’s long-criticized reserve practices. “This may help institutions overcome their reluctance,” he said.
Nicholas Roberts-Huntley, CEO of Blueprint Finance, argued that Tether’s US entry highlights that “the demand for regulated dollar tokens is real among banks and fintechs” after the stablecoin-focused Genius Act came into law. It also shows that the stablecoin market is “shifting from size and utility to differential regulatory status and institutional trust.”
“USDC has operated without a credible domestic competitor, as other entrants lacked the scale, distribution or regulatory profile to challenge its position,” he said. “USAT’s launch could change that.”
ClearStreet analyst Owen Lau took a more cautious approach.
“It’s too early to speculate at this point,” he said. “But I think it’s a risk, but manageable for CRCL/USDC.”
This could also have a risk for Tether, as the new token would eat into USDT’s existing dominance. “There could also be a risk of cannibalism,” he said.