Tether’s USAT launch directly challenges Circle’s USDC, adding new competition in the U.S. stablecoin market.
Tether launched its U.S.-regulated stablecoin, USAT, on Jan. 27, sparking market reactions.
Some experts view this as a potential challenge to Circle’s USDC dominance, as competition in the U.S. stablecoin space intensifies.
With USAT, Tether now strengthens its presence in the regulated U.S. market.
Can Tether’s USAT Challenge Circle’s USDC?
On Jan. 27, the largest stablecoin issuer Tether, joined hands with federally chartered bank Anchorage Digital and Cantor Fitzgerald, to launch its USAT stablecoin.
Following the passage of the GENIUS Act in July 2025, Tether is making its first significant push into the regulated U.S. market with USAT.
While USDT dominates globally with a $186 billion market cap, USAT positions the company to navigate the compliance-driven and highly competitive U.S. stablecoin landscape.
In the U.S., Circle’s USDC has become the stablecoin of choice for banks, fintechs, and regulated exchanges.
Over the past year, its market capitalization has risen significantly, reaching $72 billion.
Some market observers, however, believe Tether’s USAT could challenge Circle’s dominance in the U.S. stablecoin market.
Noelle Acheson, author of the Crypto Is Macro Now newsletter, noted:
“I believe USAT is a threat to USDC, even though the DNA of Tether and Circle is very different. USAT is designed to be institutional-grade, looking to attract clients that would otherwise be happy using USDC.“
Acheson highlighted several advantages for Tether’s USAT, including backing from Anchorage and partnerships with traditional finance firms like Cantor Fitzgerald.
She also pointed out that the involvement of former White House official Bo Hines could help address longstanding concerns regarding Tether’s reserve practices.
Following the USAT launch, Circle’s official USDC handle on X signaled that it intends to maintain its position as the dominant player in the U.S. stablecoin market.
https://twitter.com/USDC/status/2016182551837278550
USDC Usage on Ethereum Hits Record Levels
Circle’s native stablecoin, USDC, continues to attract strong market interest, with demand remaining high.
CEO Jeremy Allaire highlighted that USDC’s usage on Ethereum ETH $2 058 24h volatility: 1.0% Market cap: $248.36 B Vol. 24h: $14.25 B has increased significantly.
According to data from Token Terminal, USDC usage on Ethereum has reached a record level.
The analytics firm reported that quarterly USDC transfer volume on Ethereum grew roughly 400% year over year, exceeding $4.5 trillion in Q4 2025.
USDC usage on @ethereum is at an all-time high.
Quarterly transfer volume is up ~400% YoY, surpassing $4.5 trillion in Q4 '25.@circle 🤝 Ethereum pic.twitter.com/eZkUrfN7Ud
— Token Terminal 📊 (@tokenterminal) January 27, 2026
Crypto asset manager Bitwise has formally expanded into decentralised finance by joining the Morpho network as a vault curator.
The firm stated that its first on-chain strategy will aim to generate up to 6% APY on USDC through overcollateralized lending.
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