Tether’s USAT could challenge Circle’s USDC for U.S. institutional dollars

Tether's new stablecoin USAT could pose the first serious challenge to Circle's USDC in the U.S. market, analysts say, if it can win over institutional users. USAT was launched in partnership with federally chartered bank Anchorage Digital and Cantor Fitzgerald. Tether's flagship USDT dominates global crypto trading with a reported $186 billion market capitalization, while Circle's USDC has a $72 billion market cap and, the outlet said, grew twice as fast last year.

USAT is targeting a more compliance-driven U.S. arena where USDC has long been positioned as the go-to choice for banks, fintechs and exchanges operating under U.S. oversight. Analysts pointed to potential advantages for USAT, including Anchorage backing, partnerships with traditional finance firms and the "potential ability to tap into Tether’s global network through conversion with USDT," Noelle Acheson said.

Acheson also said "I believe USAT is a threat to USDC," and noted that the involvement of former White House official Bo Hines "could help institutions overcome their reluctance." Nicholas Roberts-Huntley argued that the launch highlights demand for regulated dollar tokens "after the stablecoin-focused GENIUS Act was into law" and said "the launch of USAT could change" a market that lacked a credible domestic competitor.

Other analysts were more cautious.