Don’t look now but an overseas crypto colossus has just strode onto America’s shores. I’m talking, of course, about Tether. For over a decade, the wildcat stablecoin firm operated as a global nomad before announcing in January it would set up a physical headquarters in El Salvador. Then, on Friday, founder Paolo Ardoino turned up in New York City to announce Tether would be launching a new U.S.-compliant stablecoin called USAT.
It’s a remarkable turnabout. For years, Tether was viewed as an outlaw that turned a blind eye to criminals who used its USDT stablecoin to launder profits, and to facilitate pig-butchering and other scams. Now, the company is in the tent with other respectable crypto companies. The CEO of its U.S. entity is none other than Bo Hines, the 30-year-old former Yale wide receiver whose most recent gig was at the White House, helping implement President Donald Trump’s ambitious crypto agenda.
It must have cost a pretty penny to land Hines, who recently told Fortune he was weighing over 50 job offers. Fortunately, for Tether, money is pretty much an afterthought since the firm says it made $13 billion in profits in 2024, which gives it a staggering warchest to make a play for the U.S. market, which is dominated by rival Circle.
All of this raises three questions. The first is whether there is room for another big player in the U.S. stablecoin market, which has so far played out as a winner-take-all contest in favor of Tether’s main rival, Circle. Marquee brands like PayPal and Ripple have tried to make inroads but have failed to capture even 5% of the U.S. market from Circle’s USDC. This suggests Circle’s existing customer base is a sticky one that is not looking to hop to another stablecoin.
This does, though, raise the question of whether Circle is ready for a competitor like Tether. The company’s competitive advantage till now has been on the regulatory front, where its compliance-first strategy has served it well. That strategy, though, hasn’t trained it to go up against a knife-fighter like Tether, a company that is deeply crypto-native and whose corporate culture is nimble and lean. This likely explains why Circle’s shares dropped 6% on Friday.
The final question posed by Tether’s entry into the U.S. is why it decided to create a new stablecoin in the first place rather than simply going to market with its popular USDT coin. This raises the perennial question of whether Tether’s USDT reserves are up to snuff. For years now, the company has produced quarterly “attestations” to show its house is in order—but has never submitted to an audit by a Big Four firm that would settle the question once and for all. Is this going to change now that Tether, under U.S. law, will have to arrange full-blown audits for USAT? We’ll see.
A final note: Thanks to all of you who sent kind words about the return of the Fortune Crypto newsletter. It is so good to be back in your inboxes to offer you a timely (and succinct!) take on the biggest stories in blockchain. Read on for recent highlights from the news. And if you haven’t already, sign up here.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
DECENTRALIZED NEWS
Can Stripe be trusted? Boosters say the payment giant’s Tempo blockchain will decentralize, but skeptics warn it “returns us back to the ass-covering hell” that Satoshi warned of. (The Defiant)
Beware Bitcoin ATMs: The machines are facilitating a mind-blowing level of senior fraud, according to a new DOJ lawsuit, which accuses Athena Bitcoin of turning a blind eye while charging fees around 25%. (The American Prospect)
Blackrock to put ETFs on chain: Tokenization—putting real world assets on a blockchain —has been gathering steam for a while, but is now poised to take a big leap forward as the world’s biggest asset manager moves to put its flagship Bitcoin ETF on chain. (Bloomberg)
AI + crypto—really. Double-barrel buzzwords are usually a cue to run far away. The Bittensor project may be an exception, though, in part due to founder Barry Silbert’s decade of wins in the crypto space. (Fortune)
The state of Coinbase: The FT, putting aside its longtime enmity towards crypto, offers a worthy 360 look at Coinbase and its diverse revenue streams, and how the arrival of Wall Street is both a threat and opportunity (FT)
MAIN CHARACTER
This week’s Main Character in crypto is Dan Ives, a ubiquitous Wall Street analyst known for his bullish takes on Tesla and AI firms. Ives will now be bringing his “full-steam ahead” catchphrase to a new DAT called EightCo, where he is chair, and whose focus is acquiring Worldcoin tokens.
MEME O' THE MOMENT
The Winklevoss twins took a victory lap as their crypto exchange Gemini went public. The celebration came two decades after they lost a bitter skirmish with Mark Zuckerberg for control of Facebook.
