Analysts say Tether’s new stablecoin, USAT, could pose the first serious challenge to Circle’s USDC in the U.S. market — if it can win over institutions.
USAT is Tether’s first foray into launching a U.S.-regulated U.S. dollar token aimed at institutional users, in partnership with federally chartered banks Anchorage Digital and Cantor Fitzgerald.
Tether’s flagship stablecoin is worth $186 billion USDT and dominates global cryptocurrency trading and emerging markets. But USAT enters a more crowded and compliance-driven space in the United States, and Circle has long positioned USDC as the top choice for banks, fintechs, and exchanges operating under U.S. regulation. USDC has a market capitalization of $72 billion, less than half that of Tether USDT, but grew twice as fast last year.
“I believe USAT is a threat to USDC, even though Tether and Circle have very different DNAs,” said Noelle Acheson, author of the Crypto Is Macro Now newsletter. She argued that while Circle has long positioned its token as the stablecoin of choice for regulated financial entities, USAT was clearly built to compete in the same space.
“USAT is designed to be institutional-grade and designed to attract customers who would otherwise be happy to use USDC,” she 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 exchanging with USDT.
She also noted that the involvement of former White House official Bo Hines in the project could ease concerns about Tether’s long-criticized reserve practices. “This can help institutions overcome their reluctance,” she said.
Nicholas Roberts-Huntley, CEO of Blueprint Finance, believes Tether’s entry into the United States highlights “the demand for regulated USD tokens from banks and fintechs is real” after the stablecoin-focused GENIUS bill becomes law. It also suggests that the stablecoin market is moving “from scale and utility to differentiated regulatory positioning and institutional trust.”
“USDC operates without a credible domestic competitor as other entrants lack the scale, distribution or regulatory profile to challenge its position,” he said. “The launch of USAT could change that.”
ClearStreet analyst Owen Lau was more cautious.
“It’s too early to tell,” he said. “But I think this brings risks, but they are manageable for CRCL/USDC.”
It could also create risks for Tether as the new token eats into USDT’s existing dominance. “There may even be a risk of cannibalization,” he said.
