The regulatory landscape for the Tether peg changed dramatically in 2025 and 2026. In the European Union, the Markets in Crypto-Assets (MiCA) regulation came into full effect in July 2025, requiring stablecoin issuers to hold 60% of reserves in EU banks, obtain EU licenses, and submit to local regulatory oversight. Tether chose not to comply with these requirements, resulting in USDT being delisted from major EU-licensed exchanges including Binance's European arm and Kraken. This significantly reduced USDT's user base in the EU — estimated at a 20% reduction in accessible markets — though Tether maintained that USDT remains available to EU residents through non-MiCA venues. In the United States, the GENIUS Act was signed into law in July 2025, establishing the first federal framework for stablecoin issuers. The Act requires 100% liquid reserves and mandates regular independent audits — both requirements that Tether's global USDT does not yet fully satisfy.
USAT: Tether's US Regulatory Response
2025-2026
In response to the GENIUS Act, Tether launched USAT (USA₮) in September 2025 — its first fully US-regulated stablecoin. USAT operates under strict federal oversight, is issued by Anchorage Digital Bank (the first federally chartered crypto bank), and maintains its 1:1 dollar peg backed entirely by US dollars and short-term Treasury bills held by Cantor Fitzgerald. Monthly audits are mandatory. USAT is designed to serve US institutions and businesses that require GENIUS Act compliance, while legacy USDT continues to serve the global offshore market. The two-product strategy allows Tether to maintain the globally dominant tether peg through USDT while competing in the regulated US institutional market through USAT. Analysts predict that if USAT gains significant traction among US institutions, it could reinforce the overall credibility of Tether's reserve management and indirectly strengthen confidence in the broader tether peg.
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