Bernstein: Tether launches U.S. compliance stablecoin USAT faces liquidity and distribution challenges

Bernstein analysts said Tether would face a huge challenge in launching its new stablecoin, USAT, in the US market. While the product is designed to meet US compliance requirements, including proof of reserve and bankruptcy protection, compliance alone is not enough to ensure success. Circle already leads the US market, with its stablecoin USDC deeply integrated with institutions such as Coinbase, Bullish and Anchorage Digital, and widely circulated on chains such as Ethereum, Solana and Hyperliquid.
The analysis pointed out that liquidity is the most difficult obstacle for Tether to overcome in the United States. Compared with Circle, Tether needs to build USAT's liquidity network from scratch and convince partners to accept an issuer that mainly operates offshore. In addition, if USAT's cross-chain interoperability on the mainstream public chain is insufficient, the adoption rate will be limited. At present, USDC has issued more than $9 billion in Ethereum in a single month, accounting for 58% of the DeFi stablecoin market. At the same time, the Hyperliquid native stablecoin USDH and the payment giant Stripe are also laying out new competition. Analysts believe that stablecoins will continue to be the track with the most growth potential in the crypto market as the US Genius Act establishes a stablecoin regulatory framework.