USDC Shaken by Tether’s Launch of USAT… U.S. Institutional Stablecoin Rivalry Heats Up

An analysis suggests that Circle’s U.S. dollar stablecoin USDC has, for the first time, come under clear competitive pressure after Tether launched a new stablecoin, USAT, aimed at the U.S. market. The assessment is that USDC’s position—having effectively dominated institutional demand by leveraging the U.S. regulatory environment—is now being put to the test.

According to CoinDesk on the 27th (local time), multiple market analysts said Tether’s USAT could become USDC’s first meaningful domestic rival in the U.S. market. USAT is Tether’s U.S.-regulated dollar stablecoin designed with institutional investors as its primary target, launched in partnership with federally chartered bank Anchorage Digital and Cantor Fitzgerald.

Tether’s existing flagship stablecoin, USDT, commands an overwhelming share—about $186 billion—across global crypto trading and emerging markets. By contrast, USAT is a product aimed at the tightly regulated U.S. market, setting up direct competition with USDC, which has grown mainly among banks, fintech firms, and regulated exchanges. USDC’s market capitalization is about $72 billion—less than half of USDT’s—but its growth pace last year was twice as fast.

Noelle Acheson, author of the “Crypto Is Macro Now” newsletter, said, “USAT is a threat to USDC,” adding, “Tether and Circle have different DNA, but USAT was designed to directly target customers at regulated financial institutions.” She added that USAT is “an institutional stablecoin intended to win over institutional clients that previously used USDC.”

Acheson cited Anchorage Digital’s custody capabilities, traditional finance partnerships such as Cantor Fitzgerald, and the potential to leverage a global network via conversion with USDT as USAT’s strengths. She also said the involvement of former White House official Bo Hines could help ease institutional concerns about the transparency of Tether’s reserves.

Nicholas Roberts-Huntley, CEO of Blueprint Finance, said, “Tether’s entry into the U.S. market shows there is genuine demand for regulated dollar stablecoins, particularly among banks and fintech firms.” He added that “competition in the stablecoin market is shifting from sheer scale and usability to regulatory positioning and institutional trust.”

Still, some urged caution. Owen Lau, an analyst at Clear Street, said, “It’s still too early to judge,” while adding, “USAT could be a risk factor for USDC, but at a manageable level.” He added that the launch of USAT could also pose an internal competitive risk for Tether—namely cannibalization that erodes USDT’s existing dominance.