Key Notes
- Tether launches USAT, targeting the regulated US stablecoin market.
- Circle’s USDC remains widely used, with Ethereum transfers reaching record levels.
- Bitwise deepens exposure to USDC via DeFi lending on Morpho.
Tether launched its US-regulated stablecoin, USAT, on January 27, sparking market reactions.
Some experts see this as a potential challenge to Circle’s dominance of USDC, as competition in the US stablecoin space intensifies.
With USAT, Tether is now strengthening its presence on the American regulated market.
Can Tether’s USAT challenge Circle’s USDC?
On January 27, the largest stablecoin issuer, Tether, partnered with federally chartered bank Anchorage Digital and Cantor Fitzgerald to launch its USAT stablecoin.
Following the adoption of the GENIUS Act in July 2025, Tether is making its first significant inroads into the US regulated market with USAT.
While USDT dominates the world with a market capitalization of $186 billion, USAT allows the company to navigate the compliance-driven and highly competitive US stablecoin landscape.
In the United States, Circle’s USDC has become the stablecoin of choice for banks, fintechs, and regulated exchanges.
Over the past year, its market capitalization has grown significantly, reaching $72 billion.
Some market observers, however, believe that Tether’s USAT could challenge Circle’s dominance in the US stablecoin market.
Noelle Acheson, author of the Crypto Is Macro Now newsletter, noted:
“I think USAT is a threat to USDC, even though the DNA of Tether and Circle is very different. USAT is designed to be institutional grade, seeking to attract customers who would otherwise be happy to use USDC.“
Acheson highlighted several benefits of Tether’s USAT, including support from Anchorage and partnerships with traditional financial firms like Cantor Fitzgerald.
She also noted that the involvement of Bo Hines, a former White House official, could help address long-standing concerns about Tether’s reserve practices.
Following the launch of USAT, Circle’s official USDC manager on X signaled its intention to maintain its position as a dominant player in the US stablecoin market.
USDC usage on Ethereum hits record highs
Circle’s native stablecoin, USDC, continues to see strong market interest, with demand remaining high.
CEO Jeremy Allaire highlighted that using USDC on Ethereum
ETH
$2,998
24h volatility:
2.4%
Market capitalization:
$361.83 billion
Flight. 24h:
$28.31 billion
has increased considerably.
According to Token Terminal data, USDC usage on Ethereum has reached an all-time high.
The analytics firm reported that the quarterly volume of USDC transfers on Ethereum increased by approximately 400% year-over-year, surpassing $4.5 trillion in the fourth quarter of 2025.
Using USDC on @ethereum is at a record level.
Quarterly remittance volume is up approximately 400% year-over-year, surpassing $4.5 trillion in Q4 25.@circle 🤝Ethereum pic.twitter.com/eZkUrfN7Ud
– Token terminal 📊 (@tokenterminal) January 27, 2026
Crypto asset manager Bitwise has officially expanded into decentralized finance by joining the Morpho network as a vault custodian.
The company said its first on-chain strategy will aim to generate up to 6% APY on USDC through supersized loans.
following
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article is intended to provide accurate and current information, but should not be considered financial or investment advice. Because market conditions can change quickly, we encourage you to verify the information for yourself and consult a professional before making any decisions based on this content.
Bhushan is passionate about FinTech and has a good flair for understanding financial markets. His interest in economics and finance draws his attention to the new emerging markets of Blockchain technology and cryptocurrencies. He is continually in the process of learning and remains motivated by sharing his acquired knowledge. In his free time, he reads thriller novels and sometimes explores his culinary skills.
