Key Insights:
- Tether launched USAT on January 27, a dollar-backed stablecoin issued by Anchorage Digital Bank under the federal framework of the GENIUS Act.
- USAT was designed for US institutions with monthly reserve disclosures and bank-grade oversight. USDT remained positioned for international markets.
- The split marked a structural bet that post-GENIUS stablecoin adoption would price issuer identity and disclosure cadence as core product features.
Tether announced the launch of USAT, a federally regulated dollar-backed stablecoin issued by Anchorage Digital Bank under the GENIUS Act framework. The move formalized a two-tier product strategy: USAT for US-regulated distribution and USDT for global circulation.
USAT was issued through Anchorage Digital Bank. It is a nationally chartered trust bank supervised by the Office of the Comptroller of the Currency. Cantor Fitzgerald served as the designated reserve custodian and preferred primary dealer, according to the January 27 announcement.
GENIUS Act Created Federal Stablecoin Framework
The GENIUS Act, signed into law in July 2025, required stablecoin issuers to back tokens with liquid assets and to publicly disclose their reserve composition monthly.
Legal analyses, such as an article by Latham & Watkins, identified 1:1 reserve backing and monthly reserve composition reporting as core compliance requirements for permitted issuers.
Tether stated that USAT was designed to operate within the GENIUS framework from day one. Additionally, USDT will continue to operate globally. It is progressing toward compliance with the GENIUS Act as a foreign stablecoin issuer seeking reciprocity.
The regulatory architecture separated permitted domestic issuers from foreign issuers pursuing reciprocity pathways. The OCC granted Anchorage Digital Bank a national trust bank charter in January 2021.
Tether Split US Compliance from Global Operations
Tether explicitly stated that Tether Operations was not the issuer of USAT, formalizing the separation between the two products. USAT was purpose-built for US institutions, while USDT remained the dominant stablecoin for global crypto liquidity.
The split addressed a trust gap regarding the quality of Tether USDT disclosures. S&P downgraded its reserve assessment of Tether in its recent review. Moreover, Tether is reportedly pursuing a full audit with a Big Four firm, but has not yet provided one.
USAT’s structure de-risked those concerns by placing issuance within a federally supervised stack with monthly-examined reserve disclosures. The GENIUS Act permitted issuers to be financial institutions under the Bank Secrecy Act.
Initial distribution access for USAT included Bybit, Crypto.com, Kraken, OKX, and MoonPay during the first phase.
Stablecoin Market Structure Shifted to Bank-Issued Products
Tether’s dual-product strategy mirrored a broader industry shift toward regulated issuer structures. A wave of stablecoin firms is seeking national trust bank charters, including Circle, Paxos, and Ripple. This is likely a reflection of crypto-native firms rushing to secure a piece of a trillion-dollar industry.
Standard Chartered estimated the stablecoin market could grow to $2 trillion by 2028, while Citi GPS estimated a base case of $1.6 trillion by 2030. The firm pointed to bull and bear cases of $3.7 trillion and $0.5 trillion, respectively.
The GENIUS framework accelerated convergence toward bank-and-market-infrastructure models. Charters, named custodians, monthly examined disclosures, and BSA positioning became core product attributes.
BIS research modeled linkages between stablecoin flows and Treasury bill yields. State Street’s analysis cited BIS work suggesting that stablecoin inflows at scale could have a modest effect on bill yields, with approximately 6 to 8 basis points in one scenario.
Reserve Transparency and Monthly Disclosures as Adoption Gates
GENIUS required 1:1 backing with eligible high-quality liquid reserves and monthly public reserve composition reporting. The AICPA summarized monthly reserve composition disclosure and independent accountant examination expectations as key requirements.
Tether’s baseline for USDT disclosure was quarterly reserve reporting, including past settlement-mandated reporting obligations in New York, documented in the NYAG press release.
If US institutions made monthly reserve reporting a procurement gate, USAT’s structure offered a clear compliance advantage. Issuer identity, consisting of charter plus supervisor, became a first-order product feature that counterparties underwrote.
Paolo Ardoino, CEO of Tether, stated that USAT offered institutions a dollar-backed token made in America. Bo Hines, CEO of Tether USAT, framed the launch as a digital dollar designed to meet federal regulatory expectations.
With the launch of USAT, Tether formalized a split between US-regulated and global dollar stablecoins. USAT targets US federal regime distribution, while USDT maintains global circulation with a stated path toward GENIUS compliance.
Market structure evolved toward venue-specific dollars. Regulated venues and institutions gravitated to bank-issued stablecoins, while global crypto liquidity continued to use USDT.
The segmentation created distinct product-market fits: offshore global dollars for crypto trading and regulated US dollars for institutional payments and compliant exchange rails.