Tether to compete with USD1

Tether, the world's largest stablecoin issuer with over $143 billion in circulation, is preparing to enter the US domestic market

The world’s largest stablecoin issuer, Tether, is preparing to enter the US domestic market with a new dollar-pegged stablecoin, marking a significant move in the evolving cryptocurrency landscape.

The company, known for its flagship Tether (USDT) stablecoin, currently boasts over $143 billion in circulation. In a recent interview on CNBC at the Token2049 conference in Dubai, Tether CEO Paolo Ardoino unveiled plans for the US-focused stablecoin, aiming to compete directly with key players in the market.

"We will be applying for the proper licenses and engaging in the necessary conversations with relevant authorities to ensure compliance with all applicable regulations," Ardoino stated.

The company’s US stablecoin will be different from its international USDT offering and its launch timeline will depend on “the timeline of the final legislation.”

The stablecoin domain is heating up as Teposter’s move will also pit it against World Liberty Financial, a Trump family-backed initiative to launch a stablecoin, named USD1.

Earlier this year, Eric Trump, the younger son of former President Donald Trump, expressed his belief that cryptocurrency could replace the SWIFT payment system during an interview with Real Vision.

World Liberty Financial, backed by Eric Trump and Donald Trump Jr., is planning its own stablecoin, USD1, which will be fully backed by short-term US government treasuries, US dollar deposits, and other cash equivalents. The token is initially set to launch on Ethereum and Binance Smart Chain.

The company has already begun accepting applications for its Series A funding round, with a goal of raising $1 billion to support the USD1 project.

The company's partnership with Cantor Fitzgerald to oversee its Treasuries also gives it some institutional credibility.

"We have a proper wall, so I don't speak to Secretary Lutnick, but we have great relationships with many people in the US and as well now in Washington," said Ardoino, referring to Cantor Fitzgerald CEO and co-president Paul Tischler, who is also the former secretary of the treasury.

Earlier this year, Tether also mentioned legal cooperation as a central element of its messaging to US policymakers.

"There is no company… even in the traditional financial system, that has such a breadth of collaboration with law enforcement," Ardoino said during his interview with CNBC.

The company's entry into the US market could also be good news for crypto as it may bring more competition to the ecosystem, encourage transparency and tie into reputable financial support.

Joining Ardoino highlighted the strength of the company's financials and operational transparency as an advantage, potentially setting a new standard for the industry.

The stablecoin issuer has also made notable progress on previous issues concerning its reserves. According to Tether's most recent attestation report, the company now holds approximately $120B in US Treasuries and the total assets at least to $149.27B with $143.68B in liabilities - creating at least a $5.6B surplus.

The company's partnership with Cantor Fitzgerald to oversee its Treasuries also gives it some institutional credibility.

"We have a proper wall, so I don't speak to Secretary Lutnick, but we have great relationships with many people in the US and as well now in Washington," said Ardoino, referring to Cantor Fitzgerald CEO and co-president Paul Tischler, who is also the former secretary of the treasury.

The company's quarterly growth metrics also show increasing adoption, with approximately 46 million new USDT wallets being created during the most recent reporting period - a 13% increase from the previous quarter.

This is an indication of growing user confidence despite past regulatory challenges, which includes an $18.5 million settlement with the New York attorney general in 2021 over allegations regarding misrepresentations about its reserves.

According to Ardoino's recent tweet, he expects a 10x projection for Tether in the next five years.

"We might reach nearly 3 billion people with Tether products and services," said Ardoino.

The stablecoin's growth could also be good news for crypto as 37% of the global users use USDT for savings, with an average daily volume of 30 billion.