Tether Announces USAT, A New Stablecoin for US Regulatory Compliance

Tether announced USAT, a new dollar-backed stablecoin tailored for US regulations. Bo Hines, a former White House crypto advisor, will be the subsidiary’s new CEO.

By isolating it from other assets, Tether can permit limited audits that don’t impede its ability to mint new USDT tokens. The firm holds around $100 billion in US Treasuries, so it can significantly commit to USAT.

Tether Launches USAT

Tether, issuer of the world’s largest stablecoin, has been making huge profits lately, but it faces a potential conundrum. New stablecoin regulation could kick USDT out of the US market, unless it agrees to a reserves audit. However, Tether may have found a new solution with its USAT plan:

Specifically, Tether’s press release claims that USAT will be “established as a US-regulated stablecoin.” Like USDT, it will be pegged to the dollar, but this asset is localized to the American market.

Bo Hines, the former White House Crypto advisor, will be the CEO of Tether USAT after joining the firm last month. This should help smooth over any regulatory difficulties.

His position as CEO also implies that this will be a legally-distinct corporate subsidiary, which could have several key advantages.

Regulatory Compliance Simplified

The core contradiction fueling this launch is fairly simple. The GENIUS Act mandates that all US-regulated stablecoins hold reserves in Treasury bonds and conduct regular audits.

Although Tether has a huge reservoir of Treasuries, it has persistently delayed an audit despite making public showings of certain holdings.

If Tether has its $100 billion in Treasury bills count as USAT’s reserves, this would therefore kill two birds with one stone. Its Treasuries holdings are well-documented, and the firm should have little to fear from an audit.

Meanwhile, it could continue minting USDT for a global audience without having to prove that it has the corresponding reserves.

President Trump has aimed to use stablecoins for US dollar dominance, so it was always unlikely that he would ditch the world’s biggest issues. With USAT, Tether has apparently solved the principal concerns.

We still have a few unanswered questions, like how USAT will interact with global crypto flows. How easily can international traders exchange it with USDT or otherwise interface these assets? For the most part, though, the loose ends have been tied.