The Black and White Side of Tether: The Gray Empire of USDT, the Legal Avatar of USAT

Written by | Peggy

The most stable asset in the crypto market is a dollar without an identity card.

In the past decade, USDT has transformed itself into the “de facto dollar” of the crypto world with $170 billion in assets and ubiquitous liquidity. However, the more successful it becomes, the sharper the identity anxiety: a dollar without American backing is always a loophole.

In recent years, Circle has applied for a trust bank license, Paxos has built a global clearing network, and Visa and Mastercard have also increased their efforts in stablecoin settlement. In contrast, Tether has remained in the narrative of the “offshore shadow empire.”

Under regulatory pressure and the onslaught of competitors, in September 2025, Tether, the parent company of USDT, finally presented a brand new answer: USAT. This is its first attempt to fill in the long-missing identity card.

At the same time, Tether appointed 29-year-old former White House advisor Bo Hines as CEO. Ten years ago, he was a star wide receiver for the Yale football team; now, he has been thrust onto the most sensitive battleground of the global financial market, becoming Tether's “legitimate face” in the United States.

Hines is not an outsider. In January 2025, the White House established the Presidential Digital Asset Advisory Committee, and his name prominently appears on the executive director list. At just 28 years old, he played a role in advancing the legislation of the GENIUS Act, laying the foundation for the regulatory framework of stablecoins in the United States. Just a few months later, he resigned from the White House and joined Tether, the world's largest stablecoin issuer, taking on the important task of “expanding the territory” in the U.S. market.

For Tether, this is a strategic probe deeply embedded in the U.S. political and regulatory system. Hines's joining is not only a bargaining chip for Tether in Washington but also the first step in actively correcting its “shadow empire” image.

But this is just the beginning. What truly gives USAT the opportunity to break free from the impression of being an “offshore dollar clone” is the compliance strategy designed behind it: from introducing high-level political and economic resources from the U.S. to connecting with the institutional arrangements of traditional financial markets, Tether aims to write itself into the narrative of U.S. regulation and the logic of capital markets with three cards.

The issuance of USAT is not merely an expansion of the stablecoin landscape. It signifies that Tether is beginning to build a “legal avatar” mechanism for itself: no longer content with being a global capital channel, but instead aiming to reshape its identity and become a compliant part of the American financial order.

The birth of a legal avatar, the three cards of USAT

In recent years, stablecoins have been becoming an increasingly important asset in the history of finance.

It is neither a complete dollar nor a thorough cryptocurrency, yet it has permeated every corner of the globe over the past five years. Tether, with a valuation of $500 billion, has built a massive “shadow dollar” system with USDT: in Latin America, it is the lifeline for workers' remittances; in Africa, it has replaced local inflationary currencies; in Southeast Asia, it has become a settlement tool for cross-border e-commerce.

However, as the largest supplier in this system, Tether has always navigated through regulatory loopholes. Ambiguous audits, complex offshore structures, and the shadows of money laundering and sanctions have led to it being labeled as a “shadow empire.”

For U.S. regulators, Tether's existence is a paradox: on one hand, it promotes the globalization of the dollar; on the other hand, it is seen as a potential systemic risk. A “digital dollar” that circulates widely around the globe lacks a legitimate identification from the United States.

This identity misalignment has finally forced Tether to come up with a new solution. In September 2025, it launched USAT specifically for the American market. This is not a simple iteration, but a three-card experiment: people, money, and system. Tether aims to bet on whether a shadow dollar can be accepted by the American narrative through these three steps.

First Card: Human

The first card of USAT is a person, the political endorsement of Bo Hines.

Bo Hines, 29 years old. During his college years, he was the starting wide receiver for the Yale football team. An injury cut his athletic career short, and he subsequently entered politics.

Bo Hines (Red Shirt) is playing football.

Source: Yale Daily News

In 2020, he ran for a congressional seat as a Republican candidate but was unsuccessful. However, after that, he entered the policy circle. Starting in 2023, Hines served on the White House Digital Assets Advisory Committee and later rose to the position of Executive Director. According to public information, he participated in drafting the GENIUS Act during his tenure, which is the first legislative draft prototype for stablecoin regulation in the United States and became a reference for several proposals that followed.

In August 2025, Hines left the White House. On August 19, Tether announced the appointment: Hines will join the company as a strategic advisor, responsible for compliance and policy communication in the U.S. In the same announcement, Tether also stated that it would launch a U.S. regulated stablecoin — USAT — in the coming months.

Bo Hines attended the event and delivered a speech. Source: CCN

Less than a month later, in September 2025, Tether announced the launch of USAT and officially appointed Hines as the first CEO of USAT. This means he will lead the business promotion and regulatory coordination of this product in the U.S. market.

Public information shows that this is the first time Tether has introduced an executive from a White House background into its management team. Previously, Tether's management mostly consisted of individuals with financial or technical backgrounds, lacking direct experience in U.S. policy.

Hines's involvement has tied USAT to the U.S. regulatory environment from the very beginning.

Second Card: Money

The second card is the money for Tether, to provide a set of credit endorsement.

In the past, the composition of Tether's reserves has always been controversial. Early audit documents showed that the USDT reserves included a large amount of commercial paper, short-term loans, and a mix of assets that were difficult to trace.

These assets lack transparency and have become the biggest focus of external doubts about Tether: is it really “one coin, one dollar”?

In the design of USAT, Tether seeks to dispel such concerns. An announcement in September 2025 indicated that the reserve custodian for USAT is Cantor Fitzgerald. This investment bank, founded in 1945, is one of the primary dealers for the U.S. Treasury and has long been involved in the underwriting and distribution of U.S. government bonds, holding a solid credit position on Wall Street.

Cantor Fitzgerald New York Office Entrance

Image source: Getty Images

According to Tether's plan, Cantor Fitzgerald will ensure that the reserve assets of USAT are primarily in U.S. Treasury bonds. This means that the value support of USAT no longer relies on a complex offshore asset structure, but is directly anchored in the liquidity and credit system of the U.S. Treasury bond market.

This arrangement has established a deeper binding relationship between Tether and the U.S. financial system at the asset level: it has transitioned from being a supplier of “shadow dollars” to a “distributor on the U.S. Treasury chain.” According to public information, this is also the first time Tether has explicitly introduced Wall Street primary dealers as core partners in its products.

Third Card: System

The issuance and compliance of USAT will be executed by Anchorage Digital Bank. This is one of the first in the United States to obtain federal

The digital asset bank with a Bang Trust license is also one of the few compliant entities that can be directly subject to federal regulation. Unlike USDT, which relies on offshore structures, the reserves and auditing processes of USAT will be incorporated into the U.S. regulatory framework.

This not only complies with the regulatory requirements for stablecoin issuance under the “GENIUS Act”, but also means that Tether has completed an “identity registration” on an institutional level.

The geographical choice is equally intriguing. Tether has established the headquarters of USAT in Charlotte, North Carolina – the second largest financial center in the United States, which is home to traditional financial institutions like Bank of America. Compared to New York and Washington, Charlotte has a strong financial atmosphere while being relatively distant from the spotlight of regulatory centers. This detail indicates that Tether is not satisfied with changes at the institutional design level, but is trying to “truly land” in real operations.

Bank of America Corporate Center in Charlotte

Image source: SkyscraperCenter

USAT is not just a newly added stablecoin, but a formal handshake between Tether and the U.S. market. Politically, Bo Hines; financially, Cantor; institutionally, Anchorage, together form a complete compliance combination, pushing Tether from a supplier of “shadow dollars” to a new identity as an “institutional participant.”

However, how far this transformation can go remains an unresolved issue. The fundamental characteristics of Tether have not changed: its business path remains globalized, its structure is still offshore, and the flow of funds is still complex. USAT may bring a U.S. identification card, but it is difficult to immediately rewrite the market's fundamental perception of Tether.

The launch of USAT signifies that Tether's issuance of stablecoins has evolved into an identity reconstruction: the shadow dollar begins to knock on Wall Street's door.

Will the stablecoin market landscape be reshuffled?

In the US market, Tether's new move is aimed directly at Circle and its issued USDC.

In recent years, USDC has been a representative of the compliant market in the United States. However, compared to USDT, USDC's volume and circulation are much smaller, with a market value of approximately $70 billion as of September 2025, accounting for 25-26% of the stablecoin market.

Although its volume is only one-third of USDT, USDC has established solid trust in the U.S. political arena and Wall Street thanks to its exclusive partnership with Coinbase and endorsements from institutions like BlackRock.

Circle even repurchased shares of its joint venture Center in 2024, becoming the sole issuer of USDC to further strengthen its control. For a long time, the implicit narrative of USDC has been: U.S. compliance = safety, offshore markets = risk.

However, it is precisely this path that has given Tether room to be pressured.

Tether's CEO Paolo Ardoino has repeatedly emphasized that the significance of USAT lies in breaking the potential monopoly that USDC could form in the U.S. market.

He bluntly stated, “Without USAT, the stablecoin market in the U.S. might be locked in the hands of a few institutions.” In other words, USAT's strategic mission is not just a product upgrade, but also a direct confrontation in the market against USDC.

Tether CEO Paolo Ardoino spoke at the 2025 Bitcoin Conference in Las Vegas.

Source of the image: Nasdaq

Tether has launched USAT, which is essentially an attempt to use its massive scale to fill the “compliance gap.” The significance of USAT lies in enabling Tether to combine both scale and compliance for the first time, thereby posing a direct threat to the moat of USDC.

If Circle is a top-down compliance faction rooted in the United States, then Tether is building a “dual narrative” through USAT: maintaining a vast network of a “gray empire” globally while shaping a “compliance avatar” in the U.S. market.

The future stablecoin market is likely to evolve into a “dual-track pattern”: USDT will continue to maintain a strong user base globally, especially in Latin America, Africa, and Southeast Asia, while USAT will focus on domestic and institutional clients in the United States. This structure not only stabilizes Tether's advantages in emerging markets but also attracts more institutional funds on the compliance front, bringing new expansion momentum to the entire sector.

For Tether, this is not just about issuing a new coin or advancing a listing; it is a transformation of identity. Once it can be listed on the U.S. capital markets, it will be able to completely shed the label of “shadow empire” and enter the global financial stage as a “dollar company.”

However, Tether's offensive is bound to provoke a response from its rivals. Circle is likely to accelerate its collaboration with regulators and institutions to further solidify USDC's compliance moat; licensed issuers like Paxos may take the opportunity to expand their presence in niche markets such as payments and cross-border settlements.

Traditional financial giants have also shown interest, with Visa, Mastercard, and Wall Street investment banks exploring how to integrate stablecoins into existing systems. It is foreseeable that the launch of USAT is not only the starting point for Tether's identity transformation but may also become the catalyst for a new round of competition in the stablecoin sector.

Can gray history be washed clean?

The launch of USAT has brought unprecedented opportunities for Tether, but it also comes with new risk challenges. Will the market believe that a heavily questioned “shadow empire” can truly achieve self-severance through a compliant avatar?

Historical experience shows that the “turning white” of gray power is not without precedent.

In the late 19th century, American society was generally distrustful of financial capital, and the Morgan family was even criticized as “financial oligarchs.” Strictly speaking, Morgan did not break the law, but in an era lacking modern regulation, his enormous capital and influence were often seen as “hijacking the public interest,” thus becoming a “gray power” of that time.

However, banker John Pierpont Morgan changed his image through action: on one hand, he helped the government issue bonds to resolve the fiscal crisis, and on the other hand, he assisted railroad companies in restructuring their debts. Over time, he transformed from a “capital oligarch” into a “financial agent of the state.”

Tether is making a big move today by buying US Treasury bonds and promoting a compliant version of stablecoins, which is somewhat similar to what Morgan did back in the day, exchanging solutions to national problems for legal status.

The Morgan family at the old site on Wall Street. Source: NYC Urbanism

However, not all “gray giants” can successfully complete such a transformation.

As the largest cryptocurrency trading platform in the world, Binance was almost entirely “offshore” in its early days, operating outside of regulations. In recent years, it has begun to apply for licenses in markets such as France and Abu Dhabi, attempting to move towards compliance and trying to enter the U.S. market.

However, in the United States, it faced the most stringent regulatory resistance and ultimately had to downscale and tighten its operations. This lesson from the past indicates that gray giants wanting to “turn white” will not be easily allowed by regulators.

This means that the future of Tether remains full of uncertainty. Reserve transparency, compliance enforcement, and interaction with regulators will all become indicators that will continue to be tested in the coming years.

At the same time, the acceleration of competition has begun to take shape. Circle is applying for a national trust bank license in the United States to

Strengthen its own compliance capabilities and further solidify ties with regulators and institutional investors; Paxos has revealed a significant increase in demand for its stablecoin infrastructure and has launched a “Global Dollar Network” with Mastercard, attempting to expand the use of USD stablecoins; meanwhile, Visa is also continuously expanding its support for stablecoin settlements, promoting the integration of such products into existing payment systems.

At the same time, Plasma is trying to directly embed stablecoins into the underlying infrastructure of the global payment network, using on-chain settlement and cross-border payments as entry points.

The stablecoin market is transitioning from its early stage of rampant growth into a more intense and institutionalized competitive phase.

USAT, let Tether try to submit its ID for the first time in Washington. The real test is not on the chain, but at the conference table: who can leave their name in the regulatory agenda, and who is qualified to define the next generation of digital dollars. Whether the shadow empire can step into the sunlight will be an important suspense in crypto finance.