Tether’s U.S.-focused stablecoin could launch later this year, poised to compete with payment services like PayPal’s CashApp and cater to institutional use in the U.S. as federal legislation advances.
Tether’s U.S.-Focused Stablecoin Could Launch Later This Year
Tether plans to launch a U.S.-focused stablecoin by the end of this year or early next year, contingent on stablecoin legislation.
Tether's USDT is a stablecoin pegged to the value of the United States dollar.
It was introduced in 2014 as a solution for traders on cryptocurrency exchanges, allowing them to easily convert between fiat currencies and cryptocurrencies.
USDT is issued by Tether Limited, a company based in the British Virgin Islands.
The stablecoin's value is maintained through reserves held by Tether, which are audited annually.
As of 2022, over $60 billion worth of 'USDT' is in circulation, making it one of the most widely used stablecoins globally.
The Road to Regulation: A New Payment Product for Institutions
The company’s U.S. plans depend on the final stablecoin legislation, and is aiming to create a ‘payment product’ that institutions can use. According to Paolo Ardoino, CEO of Tether, the new stablecoin aims to compete with payment services like PayPal‘s ‘CashApp’ and cater to institutional use in the U.S..
Increasing Competition and Advancing Regulation
Tether‘s plans in the U.S. come amid increasing competition in the stablecoin market and advancing federal legislation to regulate the sector. The company’s flagship USDT token is currently catered towards users in emerging markets with limited access to U.S. dollars, but the new offering would be a different product.
The stablecoin market has experienced significant growth, attracting numerous competitors.
According to a report by CoinMarketCap, over 100 stablecoins are currently available in the market.
Notable players include Terra (LUNA) with its algorithmic stablecoin, USDT issued by Tether, and BUSD from Binance.
These stablecoins aim to provide a more efficient and cost-effective alternative to traditional fiat currencies for cross-border transactions.
A Growing Presence in the U.S.
Tether‘s U.S.-based stablecoin plans highlight the firm’s growing presence in the U.S. as ‘Donald Trump‘s return to the White House allayed regulatory pressure on crypto firms.’ Ardoino toured the U.S. earlier this year, giving interviews and speaking at events including at a conference by Wall Street investment bank Cantor Fitzgerald.
A Multi-Trillion Dollar Opportunity
Competition is also increasing in the stablecoin market as U.S. federal legislative efforts to regulate stablecoins advance. It’s a big opportunity: ‘Citi projected that the sector could grow to a multi-trillion dollar by the end of the decade.’ Rival firm Circle, issuer of the $62 billion USDC token, last month announced plans of creating a cross-border payments and remittances network.
A New Era for Tether
The launch of its U.S.-focused stablecoin is a significant step forward for Tether, as it looks to establish itself as a major player in the U.S. market. With the final stablecoin legislation still pending, the company’s plans are subject to change, but one thing is clear: the future of stablecoins in the U.S. is looking brighter than ever.
Tether, a leading stablecoin issuer, launched its US dollar-backed stablecoin in April 2018.
The launch marked a significant milestone in the cryptocurrency industry, as it provided a regulated and compliant alternative to traditional fiat currencies.
Tether's USDT is pegged to the value of the US dollar, allowing for seamless conversion between cryptocurrencies and fiat.
Since its launch, Tether has become one of the most widely traded stablecoins, with over $50 billion in circulation.
