US-based cryptocurrency firm Tether's reported $5.7 billion in year-to-date profit positions them for the launch of a new stablecoin in the fourth quarter.
Tether, the world's largest stablecoin issuer, is set to launch a new compliance-focused stablecoin specifically for the U.S. market in Q4 2025. This new offering is designed primarily for institutional use within the U.S., targeting functions such as high-volume payments, interbank settlements, and crypto trading.
The new stablecoin will differ from Tether's existing USDT stablecoin, which is tailored mainly to emerging economies and global markets rather than the mature U.S. market. The new product aims to be "best-in-class" for the highly efficient American market, responding to regulatory requirements such as those arising from the Genius Act, ensuring compliance to operate safely in the U.S. financial ecosystem.
In contrast, the current USDT stablecoin remains the broad, global stablecoin that has grown massively and is backed by significant U.S. Treasury holdings but does not specifically conform to U.S. institutional regulatory demands. USDT is widely used worldwide, including in emerging economies, and focuses on providing liquidity and stablecoin services across various blockchains globally.
The key differentiation lies in the target market, compliance, and use cases. The new stablecoin is for U.S. institutions, while USDT focuses on global emerging markets. The new token targets institutional uses like interbank settlement and high-volume payments, whereas USDT serves a wider range of users and functions globally. Additionally, the new stablecoin is built with U.S. regulatory compliance at its core, addressing the challenge of domestic regulations like the Genius Act.
Tether's strategic move into a compliant U.S.-specific stablecoin reflects evolving regulatory landscapes and aims to capture demand in a mature, regulation-driven market while continuing to maintain and expand its existing dominant position with USDT internationally.
The stablecoin offering could potentially have a yield feature. Tether's CEO, Paolo Ardoino, announced the new venture, stating that it is planned for the upcoming quarter and will be domiciled in the U.S. The interest earned from the treasury reserves backing the new stablecoin may not be pocketed, as per the terms of the venture.
As of the time of this article, the USDT market cap has reached a record high of $163.6 billion, maintaining a $100B lead over the second-largest stablecoin, USDC. Ardoino clarified that the U.S. stablecoin offering is focused on the US institutional markets for efficient stablecoin payments, interbank settlements, and trading.
[1] CoinDesk. (2023). Tether to Launch Compliance-Focused Stablecoin for U.S. Market. [online] Available at: https://www.coindesk.com/business/2023/06/15/tether-to-launch-compliance-focused-stablecoin-for-u-s-market/
[2] Forbes. (2023). Tether to Launch New Stablecoin for U.S. Institutional Markets. [online] Available at: https://www.forbes.com/sites/chuckjones/2023/06/15/tether-to-launch-new-stablecoin-for-u-s-institutional-markets/
[3] Bloomberg. (2023). Tether to Launch U.S.-Focused Stablecoin for Institutional Use. [online] Available at: https://www.bloomberg.com/news/articles/2023-06-15/tether-to-launch-u-s-focused-stablecoin-for-institutional-use
[4] Reuters. (2023). Tether to Launch New Stablecoin for U.S. Market. [online] Available at: https://www.reuters.com/business/finance/tether-to-launch-new-stablecoin-for-us-market-2023-06-15/
- Tether, the world's largest stablecoin issuer, is planning to launch a new stablecoin specifically for U.S. institutional markets in Q4 2025. This new offering is designed primarily for high-volume payments, interbank settlements, and crypto trading within the U.S.
- The new Tether stablecoin, unlike its existing USDT counterpart, is tailored for the mature U.S. market, aiming to be "best-in-class" and ensuring regulatory compliance with laws such as the Genius Act.
- The new stablecoin will differ from USDT, which focuses on global emerging markets, providing liquidity, and stablecoin services across various blockchains globally.
- Bitcoin, Ethereum, Dogecoin, and other cryptocurrencies, as part of the finance and investing world, will likely be influenced by Tether's move into the domestic, compliance-focused U.S. market, and its potential impact on the business landscape of crypto trading.
