- At press time, Tether announced the launch of the dollar-backed stablecoin USAT.
- With USDT already in the market with a $186bn market cap, the question of USDT’s reserve quality comes into focus.
- If USDT is fully backed by dollar equivalents, as Tether claims, why launch another stablecoin in the same market?
- If USAT is federally regulated, why can’t USDT become what Ripple’s RLUSD did?
Suggested Reading: How to Launch a Stablecoin in 2026?
Tether Launches USD-backed Stablecoin, USAT
Tether has just announced the launch of a new stablecoin, USAT, for users in the USA, even though it already has a much larger stablecoin, USDT ($186 billion market cap), for the same market. The stablecoin is supposed to comply with the guidelines set by the GENIUS Act, which reportedly encourages US dollar-backed stablecoins.
Raises Questions on Tether’s Transparency Claims on USDT
Since USDT and USAT will be for the same market, this raises a critical question: why has Tether launched a new stablecoin despite already holding 50% dominance in global markets?
If USAT is launched to comply with the GENIUS Act, nearly every other stablecoin issuer should have launched a new token. However, other stablecoins like USDC, RLUSD, FDUSD, PYUSD, and even the Trump-backed USD1 have not launched any new token.
If USAT is launched to provide credible reserves reporting, doesn’t it raise serious questions about the quality of reserves with the USDT? The latter has already been in the middle of serious doubts. Critics of USDT claim that it has opaque reserves and that its audits are conducted infrequently by a lesser-known auditing firm.
The data in the tweet above highlights that Tether holds only a fraction of the reserves that traditional banks maintain and does not maintain 1:1 asset backing for its USDT. This means that for every dollar worth of USDT issued, Tether might not have assets equal to its face value.
Is Tether Trying to Cover Up Something?
Tether has reportedly bought more gold than any other country in recent times. In the last quarter, it has reportedly bought 27 tons of Gold worth $4.4 billion,
The purchases are entirely funded by its profits, which exceeded $10 billion for the first 3 quarters, i.e., Jan-Sep this year.
The accelerated purchases of gold signal either a rush to acquire the top metal, like every other bank, due to inflation in the US Dollar, or a desperate attempt to bolster asset quality backing USDT.
Disclaimer: BFM Times acts as a source of information for knowledge purposes and does not claim to be a financial advisor. Kindly consult your financial advisor before investing.
