Track market-moving stories before they get noisy

Orionx, a Chilean crypto exchange backed by USDt stablecoin issuer Tether, is shutting down after uncovering a multimillion-dollar issue linked to asset custody.

The exchange said it began a permanent closure process after a forensic audit found more than $7 million in custodial assets had moved to wallets it did not manage, according to a company announcement shared on X on Thursday.

“Our sole priority now is to return as much of our clients’ assets as possible,” Orionx said, adding that withdrawals are temporarily suspended.

The closure comes just 15 months after Tether led Orionx’s Series A as part of its push to expand digital asset adoption in Latin America.

Orionx leaves timing of $7 million transfers unclearOrionx’s post did not specify when the more than $7 million in transfers occurred or how the discrepancy was initially uncovered.

As part of its efforts to comply with Chile’s Fintech Law, Orionx conducted a review of its operations in 2025 and brought in financial professionals, according to the major Chilean newspaper La Tercera, citing the company’s criminal complaint.

On Aug. 27, chief operating officer Thomas Mac Millan detected a “significant mismatch” between balances recorded in Orionx’s systems and assets actually held in custody, according to the complaint.

An internal review followed, and Orionx later commissioned an external forensic audit that compared its records with data verifiable onchain. The audit found that balances recorded in Orionx’s systems exceeded the assets held at its custody addresses for Bitcoin (BTC), Ether (ETH), XRP and Polygon (POL).

The criminal complaint reportedly alleges that assets were transferred out of Orionx’s custody between 2018 and 2021, including to accounts on other crypto platforms.

Orionx accuses co-founders, who deny wrongdoingOrionx said it filed a criminal complaint on Wednesday against former executives Roberto Zibert and Joaquín Díaz, both co-founders who allegedly had access to the company’s crypto custody systems.

The complaint alleges that an account associated with Díaz received more than $1.5 million across 14 transfers, while another wallet allegedly received 187 Ether, more than 4.1 million USDt (USDT) and 200,000 USDC from Orionx, La Tercera reported.

Former executive and Orionx co-founder Roberto Zibert. Source: LinkedIn

Zibert and Díaz denied the allegations, saying they never acted against customers’ interests and that the cause of Orionx’s asset shortfall remains unclear.

Tether backed Orionx in 2025Founded in Chile in 2017, Orionx grew from a retail crypto exchange into a platform offering crypto payment and financial services in Chile, Peru, Colombia and Mexico.

Tether invested in Orionx in June 2025, exclusively leading the exchange’s Series A funding round, according to an archived version of Tether’s announcement. The announcement is no longer available on Tether’s website.

Cointelegraph contacted Tether and Orionx for comment but had not received a response by publication.

Magazine: Tether sued over $42M in frozen coins, 6,600 students get crypto loans: Asia Express

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

A planned dollar stablecoin backed by 21 global financial institutions will begin with regulatory resources, corporate relationships, and international payment connections. Four industry executives told crypto.news, however, that institutional backing will not guarantee adoption unless the token can match the liquidity, accessibility and portability already offered by USDT and USDC.

Summary

The 21-member consortium plans to launch its dollar stablecoin during the first half of 2027. Experts said established banking relationships could help the token gain early institutional distribution. Interoperability, wallet support, and reliable redemption will determine whether it circulates beyond member banks. The consortium must identify who carries legal responsibility for reserves, redemptions, and transaction failures. USDT and USDC could lose market share even as bank-issued tokens expand the overall stablecoin market. The consortium committed to forming a new stablecoin company during the second half of 2026, subject to closing conditions. Its members include Bank of America, Citi, Goldman Sachs, Deutsche Bank, UBS, and other financial institutions across North America, Europe, Asia, Africa, and the Middle East.

The unnamed venture intends to launch a US dollar-denominated stablecoin during the first half of 2027. It may later introduce stablecoins tied to other G7 currencies, with a euro-denominated token listed as its first expansion priority.

The consortium has not disclosed the token’s name, supported blockchains, reserve custodian, governance model, or redemption process. Those details could determine whether the product becomes a widely used payment instrument or remains primarily a settlement token within the institutions’ existing networks.

21-bank stablecoin starts with a distribution advantage Utkarsh Ahuja, founder and managing partner at Moon Pursuit Capital, told crypto.news that the consortium starts with relationships that normally take new financial products years to develop.

The participating institutions already serve corporate treasury departments, process international payments, and operate compliance systems across several jurisdictions. According to Ahuja, those connections could make it easier to introduce the stablecoin into existing corporate workflows, particularly for cross-border settlement.

“The banks start with something that normally takes a financial product years to build: distribution into the companies that actually move very large amounts of money.”

Ahuja cautioned that established relationships do not provide the portability that USDT and USDC have built across exchanges, wallets, blockchains, and market makers. The consortium could bring corporate clients to the token, he said, but convincing those clients to use it outside the participating banks’ network will be more difficult.

Jerald David, CEO of Lynq Network, said the initiative has both offensive and defensive motives. It could open new blockchain payment revenue for the institutions while protecting payment activity and commercial balances from migrating to non-bank stablecoin issuers.

Stablecoin issuers can earn income from the assets held against circulating tokens, including short-term government debt. When deposits move from banks into stablecoins, part of the balance and its associated economics can move with them.

David said a shared token would allow the institutions to enter blockchain payments through a framework over which they retain greater control. However, he warned that scale alone would not make the proposed token more attractive than established alternatives.

USDT and USDC currently benefit from years of integration. A recent crypto.news analysis of stablecoin distribution placed the wider market at approximately $316 billion in mid-2026, with USDT accounting for about $187 billion and USDC representing roughly $75 billion.

Interoperability will decide whether the token circulates David described issuance as the easier part of the project. Businesses will also need reliable ways to move between the consortium’s stablecoin, existing stablecoins, tokenized deposits and conventional bank accounts.

“Interoperability will be more important than issuance,” David said.

“If capital can enter the token easily but cannot move out or across networks just as efficiently, the consortium risks creating another isolated pool of liquidity.”

Such interoperability would require dependable minting and redemption, custody arrangements, market makers, and settlement infrastructure connecting different forms of digital and conventional money. An institution receiving the new token must be able to redeem it for dollars or exchange it without facing long delays, high spreads, or limited trading depth.

Alvin Kan, chief operating officer of Bitget Wallet, told crypto.news that self-custodial wallets would examine the token’s entire user journey before supporting it. Relevant functions include holding, transferring, swapping, and spending the stablecoin.

Wallet providers would need audited smart contracts, transparent issuance and redemption processes, and consistent technical standards across every supported blockchain, according to Kan. They would also need to know whether tokens are issued natively on each network or transferred through bridges.

Kan said native mint-and-burn systems or coordinated cross-chain issuance would generally be preferable to wrapped assets because they could reduce bridge risks and prevent liquidity from being split among several representations of the same stablecoin.

Wallets could use intent-based routing and liquidity aggregation to shield users from some of that complexity. However, Kan said wallets cannot eliminate fragmentation without cooperation from issuers, banks, and liquidity providers.

“Ultimately, interoperability will matter more than how many bank tokens get issued. The winning infrastructure will make multiple tokens feel like one connected financial system.”

Gas abstraction could remove another obstacle. Users may be less willing to adopt a dollar stablecoin if they must first acquire a separate blockchain token to pay network fees whenever they transfer or spend it.

The same problem applies to identity verification. Kan said reusable credentials or privacy-preserving attestations could allow users to demonstrate that they have completed required checks without repeating the full process for every issuer. Different regulatory requirements would still apply across jurisdictions, meaning one universal identity credential is unlikely to resolve every compliance issue.

Bank backing does not guarantee stablecoin adoption Waseem Salim, CEO of Valdora, told crypto.news that an established issuer can provide initial trust, but utility determines whether people continue to hold and use a stablecoin.

Société Générale offers an example of the difference between institutional backing and circulation. Its digital asset subsidiary launched USD CoinVertible on Ethereum and Solana in 2025. Despite its connection to a major global bank, official SG-FORGE data showed approximately $12.55 million of the stablecoin in circulation as of Sept. 4.

“A strong name helps, but people won’t adopt a stablecoin just because there’s a bank behind it,” Salim said. “They need a reason to actually use and hold it.”

According to Salim, users will consider whether the token works with their existing wallets and preferred networks, whether sufficient liquidity is available, and how easily they can redeem it. They will also examine what they can do after acquiring it.

Possible advantages include cheaper cross-border settlement, direct integration with corporate bank accounts, and access to tokenized financial products. Those benefits would need to be substantial enough to compete with USDT and USDC integrations and the familiarity of conventional deposits.

Kan similarly described adoption as utility-driven. Institutional reputation could attract users who value regulated redemption and established banking relationships, but the token would need to work across payments, swaps, merchant transactions and local cash-out services.

The last step could prove decisive. A stablecoin may move between blockchains within seconds, but Kan said much of that advantage disappears if recipients face high costs when converting it into reais, rupees or pesos.

The World Bank’s latest remittance pricing data puts the average cost of sending money internationally at 6.36% of the transferred amount. Bank-backed stablecoins could compete in those corridors if they reduce the complete delivered cost, including foreign-exchange spreads, network fees, redemption charges and local payout expenses.

Domestic conditions will also affect adoption. Kan said stablecoins must offer more than fast local transfers in markets already served by systems such as India’s UPI, Brazil’s Pix and SEPA Instant in Europe. Their stronger use cases in those regions may involve international commerce, multi-currency access and digital-asset settlement.

Reserves, redemption and liability will test trust The consortium’s size creates another question: which entity will ultimately stand behind the token?

David said businesses should not have to determine which of the 21 participating institutions is responsible when a redemption fails. He called for one clearly identified legal issuer, segregated and independently verified reserves, and defined obligations for the issuer, participating institutions, and infrastructure providers.

“Shared distribution is an advantage. Shared liability is not,” David said.

The consortium has said it intends to comply with the US GENIUS Act and the EU’s Markets in Crypto-Assets framework where applicable. The GENIUS Act established requirements covering one-to-one reserves, disclosures, redemption, and permitted issuers, although US regulators were still completing implementation rules during 2026.

Kan said wallets would also require information about freezing powers, transfer restrictions, sanctions enforcement, and how compliance responsibilities are divided among the issuer, wallet, and fiat service providers. Such controls become more complex when tokens circulate across public blockchains and national borders.

Redemption risks could grow if the stablecoin becomes a gateway into tokenized investments. Salim warned that users must understand that yield does not appear merely because an asset is held onchain.

If returns come from business lending, government securities, or market strategies, platforms should identify the underlying source, asset manager, custodian, and counterparties. They should also explain how quickly the assets can be sold and what happens if a borrower defaults.

Salim said those arrangements differ from interest earned on a bank deposit because the legal relationship, custody model, liquidity, and protections may not be the same.

Platforms could also create a mismatch if users expect immediate stablecoin withdrawals while the underlying capital is invested in assets that trade during limited hours or take longer to sell. Salim said providers may need liquid reserves, staggered maturities, redemption windows, or withdrawal queues aligned with the underlying assets.

USDT and USDC may face competition as the market expands Ahuja expects a bank-issued dollar stablecoin to place more immediate pressure on USDC in institutional markets where Circle and major banks could compete for the same corporate balances.

If companies transfer balances into the new stablecoin, the reserves and income generated from those assets would move with them. However, Ahuja said USDT occupies a different position because much of its demand comes from markets where access to US banking services remains limited or inefficient.

The consortium’s Western banking relationships would not automatically replicate Tether’s reach in those regions. USDT is widely used on exchanges and in markets where people seek access to dollars outside conventional banking channels.

Competition may also enlarge the market rather than redistribute a fixed amount of stablecoin activity. Banks could bring corporate transactions onchain that currently do not use USDT, USDC, or any public blockchain.

Ahuja said Tether and Circle could therefore lose percentage share while their circulation and transaction volumes continue growing. He recommended examining the composition of stablecoin activity rather than relying solely on market-share figures.

The effects could extend beyond the issuers. A market containing bank stablecoins, tokenized deposits, USDT, USDC, and tokens tied to other currencies would increase demand for companies connecting those pools.

Ahuja identified liquidity providers, payment infrastructure, custody services, compliance tools, and blockchain networks as potential beneficiaries. Tokenized-asset platforms could also gain if regulated digital cash allows funds and securities to settle on the same infrastructure.

David said the consortium’s traction should ultimately be measured through active business users, recurring settlement, redemption performance during market stress, and acceptance outside the 21 participating institutions. Large transaction volumes alone could reflect a small group of members moving capital among themselves.

The consortium’s banking relationships could put its token in front of corporate users quickly. The four executives nevertheless agreed that liquidity, interoperability and external acceptance, not the number of institutions behind it, will determine whether the stablecoin becomes a genuine rival to USDT and USDC.

Tether’s USDT ecosystem has expanded to Stellar. This gives users on the payments-focused blockchain access to more than $180 billion in USDT liquidity through USDT0.

USDT0 will now connect Stellar to Tether’s broader stablecoin liquidity. The integration uses LayerZero’s OFT interoperability standard. 

Stellar was originally designed around moving digital assets and cross-border payments. 

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The foundation has placed a huge focus on stablecoins, tokenized real-world assets and institutional infrastructure. These have become the key drivers of network activity. 

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There have been several stablecoins initiatives spearheaded by Stellar this year. In June, for instance, MoneyGram launched MGUSD, a dollar-denominated stablecoin built on Stellar. 

Stellar's rather formidable ecosystem includes Circle’s USDC, Franklin Templeton’s BENJI and other stablecoin and asset-issuance projects.

Expanding liquidity stack Stellar said stablecoin payment volume reached $5.5 billion in the first quarter of 2026, up 72% from a year earlier. At the same time, tokenized real-world assets on the network surpassed $2 billion shortly after the quarter ended.

USDT0 will let Stellar users access the same USDT liquidity available on other connected networks. That could make the network more attractive to exchanges, wallets, and other segments of the industry. 

Tether is dominant in many emerging markets, including parts of Latin America, Africa and Asia-Pacific. In these regions, stablecoins are being adopted en masse for savings, remittances and dollar-denominated payments. USDT0 is initially available through wallets, exchanges and applications including Kraken, Freighter, Lobstr, Bitget, Fireblocks, Ramp Network and SushiSwap. Additional integrations are expected to take place in the future. 

Tether CEO Paolo Ardoino has challenged the Bank for International Settlements’ preference for tokenized bank deposits, arguing that fully reserved stablecoins give users a stronger alternative to money held under fractional reserve banking.

Summary

Tether CEO Paolo Ardoino challenged the BIS preference for tokenized bank deposits, arguing that fully reserved stablecoins offer users a safer alternative. BIS chief Pablo Hernández de Cos said stablecoins face problems with redeemability, interoperability, financial integrity and monetary sovereignty. Ardoino questioned why savers would keep money in fractional reserve products when stablecoins can hold reserves in liquid assets such as U.S. Treasuries. The debate has reached U.S. lawmakers as banking groups warn that stablecoin rewards could pull deposits from banks and reduce funds available for lending. The Bank for International Settlements laid out the case for tokenized deposits on Aug. 28, when General Manager Pablo Hernández de Cos told the Jackson Hole Economic Symposium that stablecoins still fall short of several properties needed to function as money at scale. Ardoino responded by questioning why savers would choose bank deposits when stablecoins can hold reserves in highly liquid assets such as U.S. Treasuries.

“BIS is rightfully worried about the fact that stablecoins are exposing the emperor without clothes,” Ardoino said. “Why someone should choose to put his savings into a fractional reserve product while stablecoins are fully reserved?”

Tether CEO challenges the BIS case for tokenized deposits Hernández de Cos argued that stablecoins face problems with redeemability at par, interoperability and financial integrity, while their use outside the United States can create concerns over monetary sovereignty and digital dollarization.

In the BIS model, tokenized deposits remain liabilities of commercial banks and settle through central bank accounts. De Cos said this structure preserves the “singleness” of money because different bank liabilities remain redeemable at par through central bank settlement.

Stablecoins work differently. A user holding USDT who needs to pay someone accepting only USDC may first need to exchange one token for the other in a secondary market, where prices can deviate from their dollar pegs, particularly during periods of stress.

Public blockchains create another concern for the BIS. Stablecoins can circulate across multiple networks and through self-custody wallets, while moving the same asset between chains can require bridges or other infrastructure. De Cos argued that this structure creates interoperability problems and makes consistent enforcement of anti-money laundering and counterterrorism financing controls more difficult.

Ardoino focused his response on the reserve structure behind the two forms of digital money. The Tether executive argued that stablecoins can be backed almost entirely by liquid reserves, including U.S. government debt, while commercial banks operate under a fractional reserve system in which only part of their liabilities are held in liquid assets.

His comments put the reserve question at the center of a debate that has increasingly divided stablecoin issuers and the banking sector as both compete to move fiat-denominated money onto blockchain networks.

Crypto.news recently examined how a tokenized bank deposit remains on the issuing bank’s balance sheet even after being represented on a blockchain. Unlike stablecoins, customer funds do not move into a separate reserve portfolio and can remain available to support the bank’s lending operations.

Tokenized deposits are moving beyond pilot programs Banks have started building infrastructure around that model as stablecoins take a larger role in digital payments.

JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are developing a shared deposit token network through The Clearing House, with a launch targeted for the first half of 2027. The planned system would initially give multinational companies access to programmable treasury and cross-border payment services.

SWIFT has pursued a similar route. In July, the financial messaging network launched a  blockchain-based shared ledger with 17 major banks, including Citi, HSBC, UBS and BNP Paribas. The system was designed around tokenized bank deposits for round-the-clock cross-border payments.

Custodia Bank and Vantage Bank have taken a different approach by combining the two structures. Their dual-purpose token model is designed to operate as a bank deposit while inside the Hazel network and function as a stablecoin when transferred outside it. The Ethereum-based system has been under testing ahead of a planned fourth-quarter 2026 rollout.

Despite supporting tokenized deposits, Hernández de Cos acknowledged that the model has its own unresolved problems. No multi-bank or cross-jurisdictional ecosystem currently issues tokenized deposits through a fully interoperable framework, he said. Existing systems remain concentrated on permissioned platforms, while some designs resemble bank-issued stablecoins.

The BIS chief said stablecoins and tokenized deposits could ultimately coexist, but argued that tokenized deposits should handle most everyday payments while stablecoins serve more specialized functions.

Stablecoin growth raises the deposit flight question Ardoino’s criticism comes as the competition for deposits has become part of the U.S. debate over crypto market structure.

Banking groups have repeatedly pushed lawmakers to tighten stablecoin reward provisions in the Digital Asset Market Clarity Act. In July, the American Bankers Association, Independent Community Bankers of America and 76 state banking associations urged Senate leaders to revise Section 404 before the legislation reached the Senate floor.

The groups argued that allowing crypto platforms to provide certain rewards on stablecoin balances could encourage customers to move funds out of traditional bank accounts. Under that argument, deposit losses could leave community banks with less funding available for lending.

Citigroup CEO Jane Fraser repeated the concern in August while supporting passage of the CLARITY Act. Fraser warned that stablecoin rewards could draw deposits away from banks and affect their ability to extend credit.

The dispute partly traces back to the GENIUS Act, which prevents payment stablecoin issuers from directly paying interest or yield to holders. Crypto exchanges and other service providers can still offer some rewards depending on how their programs are structured, leaving lawmakers and banking groups divided over where the restrictions should apply.

Hernández de Cos raised a similar funding issue at Jackson Hole. Stablecoin issuers can increase demand for government debt by placing reserves into Treasury securities, potentially lowering sovereign borrowing costs, he said. At the same time, money leaving commercial bank deposits could increase bank funding costs and eventually raise borrowing costs for households and companies.

Ardoino presented the same movement of funds from the opposite perspective.

“What happens to financial system if people start realizing that stablecoins are safer and move their savings into the better asset class?” he said. “We’re in the Find Out phase.”

USDT remains the largest stablecoin by circulation and has developed a substantial user base outside the United States. Ardoino has repeatedly positioned the token as a dollar-based savings and payments product for markets where access to U.S. dollars or conventional banking services can be limited.

Tether has pursued that market through payment and remittance investments, including its May investment in cross-border platform LemFi, which serves users across African and Asian remittance corridors.

Ardoino said some economies now rely heavily on USDT for both domestic and foreign commerce, while the BIS has warned that increasing use of dollar-denominated stablecoins outside the United States could weaken monetary policy transmission and increase dependence on external monetary conditions.

Revolut has begun rolling out EURR, a euro-pegged stablecoin, to eligible customers in Denmark, Poland and Portugal, with a wider rollout across the European Economic Area planned later this year. The token is Revolut's first stablecoin and is designed to hold a fixed value of €1.

EURR is issued by Bridge Building S.A., the Luxembourg-based entity of Stripe-owned stablecoin infrastructure firm Bridge, which Stripe acquired for $1.1 billion in February 2025. Bridge Building holds an Electronic Money Institution licence and a Markets in Crypto-Assets (MiCA) authorisation from Luxembourg's CSSF, giving it the legal standing to issue e-money tokens across the EEA. Revolut Digital Assets Europe Ltd, the fintech's regulated crypto arm, distributes the token under its own MiCA licence from the Cyprus Securities and Exchange Commission.

Revolut said in its announcement that EURR gives its customer base an on-chain option denominated in euros rather than dollars, since most stablecoins in circulation are pegged to the US currency. The token launches on Ethereum, with support for additional blockchain networks and external wallet transfers to follow. Revolut framed the launch as the first step in a broader stablecoin strategy, with tokens tied to other currencies already in development through separate regulatory pathways. It did not name which currencies.

The timing is not incidental. Revolut is removing Tether's USDt from its European retail offering by August 31, completing a phased withdrawal that began in July with a purchase freeze and continued through a deposit block later that month. Tether has not sought MiCA authorisation, and MiCA's reserve rules effectively force platforms operating in the EEA to delist stablecoins that lack a licensed issuer. Revolut is one of the last major European platforms to complete that transition, following exchanges including Coinbase, Crypto.com, Kraken and OKX, which removed or restricted USDt trading pairs over the preceding eighteen months.

EURR's launch is significant less for the token itself than for what it represents about the structure of Europe's stablecoin market. Dollar-pegged stablecoins still account for the overwhelming majority of global stablecoin supply, and euro-denominated tokens remain a small fraction of the sector even as MiCA has forced issuers to seek local authorisation. Revolut is entering a field that already includes Circle, Banking Circle and AllUnity, alongside Qivalis, a euro stablecoin backed by a consortium of 37 European banks. What distinguishes Revolut is distribution. It can place EURR directly in front of more than 80 million existing customers who already hold euro balances in its app, instead of building a token that has to find crypto-native users on its own.

That distribution advantage is the real story. A regulated euro stablecoin embedded inside a mainstream banking app, sold through a retail interface rather than a crypto exchange, tests whether stablecoins can move from being a trading instrument into becoming an everyday payments and settlement tool in Europe. Revolut's own framing points toward cross-border transfers, business payments and settlement as the intended use cases beyond simple crypto trading. Whether EURR can build meaningful liquidity against a market still dominated by dollar tokens will depend on how quickly Revolut expands the rollout beyond its initial three markets.

Sberbank, Russia’s largest bank, plans to accept Ethereum and Tether alongside Bitcoin as loan collateral once Russian regulators permit their public circulation, according to TASS.

The bank is preparing to offer crypto-backed loans to corporate clients after successfully testing the model with mining firm AO Intelion Data last year. It is also working on crypto custody services as digital assets take on a larger role in Russia’s financial system and cross-border trade.

Anatoly Popov, deputy chairman of Sberbank’s management board, said the bank is prepared to adapt its existing products once the legislation comes fully into force.

Popov said Sberbank had anticipated the regulatory changes and already gained practical experience working with crypto. The bank plans to gradually expand its digital-asset products under the new rules, including lending secured by crypto holdings.

Bitcoin will be part of the bank’s collateral offering, while Ethereum and Tether could be added in the future. Popov said those assets would become eligible after the Bank of Russia authorizes them for public circulation and the remaining provisions of the new regulation take effect.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.

Tether CEO Paolo Ardoino said on Aug. 23 that several developing economies increasingly rely on USDT for domestic commerce, international trade and dollar denominated savings.

Summary

Ardoino said USDT use is rising across Venezuela, Argentina, Bolivia and Turkey amid monetary instability. Users increasingly hold USDT as digital dollars when local currencies weaken or cash dollars become scarce. Chainalysis ranked Venezuela eighteenth, Turkey fourteenth and Argentina twentieth for global crypto adoption in 2025. Chainalysis measured nearly $1.5T in Latin American crypto activity from July 2022 through June 2025. Tether said its technology served more than 570 million users worldwide as of March 2026. “The economies of several developing countries rely heavily on USDT, both for domestic and foreign trade,” Ardoino wrote in a post. He said Tether’s financial inclusion mission was becoming more important.

Ardoino cited Venezuela, Argentina, Bolivia and Turkey as markets where people use the stablecoin in response to inflation, currency depreciation, limited access to dollars and restrictions within conventional financial systems.

His statement describes Tether’s view of adoption. No single public dataset measures how dependent entire national economies are on USDT. Independent blockchain research, central bank data and exchange activity nevertheless support the broader conclusion that dollar stablecoins have gained traction in those markets.

Currency instability is supporting USDT adoption USDT is designed to track the U.S. dollar, allowing users to obtain digital dollar exposure without holding a U.S. bank account. It can move between compatible wallets and exchanges at any time, although conversion options, costs and regulations vary by country.

The product can appeal to users whose local currencies are losing purchasing power. It also provides an alternative when physical dollars are scarce or cross border bank transfers are expensive and slow.

Turkey continued to face elevated inflation despite progress under its disinflation program. Consumer inflation fell from 49.4% in September 2024 to 30.9% in December 2025, according to an International Monetary Fund review. The IMF projected inflation of 23% at the end of 2026.

Argentina has also continued addressing inflation and foreign exchange pressures. The IMF reported that monthly inflation reached 3.4% in March 2026 following currency depreciation and weaker demand for pesos.

Stablecoin demand extends beyond those two markets. Chainalysis ranked Turkey 14th, Venezuela 18th and Argentina 20th in its 2025 Global Crypto Adoption Index. When adjusted for population, Venezuela ranked ninth worldwide.

Venezuela and Bolivia show commercial use cases In Venezuela, local businesses reportedly use USDT for retail payments and some import and export settlements. The stablecoin operates alongside bolivars, physical dollars and other digital assets within what local observers describe as a hybrid currency economy.

Chainalysis estimated that Venezuela received $44.6 billion in cryptocurrency value between July 2022 and June 2025. The figure covers all tracked crypto assets and does not represent USDT alone.

Bolivia provides a clearer official signal. The Central Bank of Bolivia publishes a reference USDT exchange rate based on weighted peer to peer activity on Binance. Its published data show how the stablecoin trades at a premium to the country’s official dollar rate.

The bank’s January financial stability report also identified foreign currency restrictions, higher inflation and low international reserves as continuing risks.

As previously reported, Bolivia moved toward recognizing USDT within its national payment system. Local banks already provide some USDT services, while businesses have used crypto for international payments and fuel related transactions.

The government has not completed a national framework making USDT equivalent to legal tender. Any description of formal payment status therefore remains forward looking.

Regional data support the broader trend Chainalysis measured nearly $1.5 trillion in Latin American crypto activity between July 2022 and June 2025. Argentina accounted for an estimated $93.9 billion, Venezuela $44.6 billion and Bolivia $14.8 billion.

Centralized exchanges processed 64% of regional activity, showing that users generally obtain digital assets through conventional trading platforms rather than decentralized protocols.

In related coverage, dollar stablecoins accounted for 40% of purchases by Bitso users during 2025, compared with 18% for Bitcoin. The exchange operates across several Latin American markets, so those figures should not be treated as Argentina only data.

Tether says its products served more than 570 million people by March 2026. That is a company supplied estimate rather than a count of fully identified individual users because one person can control several blockchain addresses.

The company’s reported USDT supply reached a record $188 billion during 2026, reinforcing its position as the largest dollar stablecoin.

Users still face issuer, regulatory, wallet and network risks. USDT represents a claim supported by Tether’s reserves, not a bank deposit, and availability can change when governments or exchanges introduce new stablecoin rules.

Uruguay seemed like the perfect place for cryptocurrency giant Tether to launch a bitcoin mining operation.

The company, which has issued nearly two thirds of all stablecoins in circulation, picked this still largely agricultural corner of South America that has in recent years become a hub for global fintech firms, helped by its reputation for political stability and favorable tax conditions.

In 2023, Tether said it would build two mining ​sites in Uruguay, part of a spending spree it said would bring economic development, new energy infrastructure and jobs to the country.

But amid a dispute over the amount of energy that would be supplied for its thirsty bitcoin mining, the plans unraveled and the ‌mining sites were abandoned, a Reuters review of documents and interviews with multiple people reveals. Little was left to show for a project that one person with direct knowledge estimated likely cost around $120 million.

Tether did not respond to requests for comment for this article.

The aborted Uruguay investment offers a rare window into the often opaque operations of Tether, as it seeks to expand and reinvest its vast profits into industries as varied as brain implants and soccer.

It also demonstrates how the basic economics of bitcoin mining — turning cheap energy into crypto profits — may no longer be adding up, after crypto prices dropped and as energy prices rise.

Tether’s ability to quickly dip in and out of Uruguay is typical of the “hypermobile” nature of bitcoin mining ​activity, which does not tend to create substantial long-term jobs or benefits for the host country, said Pete Howson, an assistant professor at Northumbria University.

“This plug-and-play infrastructure is very easy to do — literally pulling the plug and then move it to somewhere else,” he said.

'THE PERFECT PLATFORM'
In May ​2023, Tether announced the launch of bitcoin mining operations in Uruguay, without disclosing an investment value. It called Uruguay the “perfect platform," citing its abundant renewable energy and robust grid.

Tether CEO Paolo Ardoino and chairman Giancarlo Devasini are frequent ⁠visitors to Uruguay's booming beach resort of Punta del Este — dubbed the Monaco of South America — where they host private gatherings, industry sources told Reuters, and American billionaire Peter Thiel is building a $10 million residential compound nearby.

At the time, Tether said the plan involved “investing resources into energy production," without providing details.

Bitcoin mining, an energy-intensive ​process in which computers solve complex computational puzzles to be rewarded in bitcoin, is a core part of Tether’s investment plans. Ardoino told an industry conference last year the company has invested more than $2 billion in energy production and bitcoin mining.

A former Tether contractor who spoke to Reuters on condition of anonymity because they ​are not allowed to speak to the media said Uruguay had been intended as a “first step” for Tether’s bitcoin mining plans across South America.

Tether invested roughly $60 million in each of two mining sites in the department of Florida, totaling roughly $120 million, the former contractor said, citing their own assessments of how much the company had spent.

The project, a sizable deal for a country where annual foreign direct investment is around $2 billion, was aimed at using Uruguay as a testing ground before moving to bigger markets such as Brazil, Paraguay and Argentina, the person said. Tether has since announced investments in bitcoin mining and platforms in Brazil.

Based in El Salvador with just a few hundred employees globally, Tether controls around $183 billion-worth of stablecoin. Some ​policymakers worry that stablecoins, a type of cryptocurrency pegged to official currencies, risk endangering financial stability by increasing the linkages between crypto and mainstream finance.

Tether says its stablecoin is backed by an equivalent amount in real-world assets. Those assets have made it a top 20 holder of U.S. Treasuries — earning the company billions in ​profits now used to build a portfolio of investments it says is worth around $20 billion.

Most of those 100-plus investments are not disclosed, but those it has include data centers, video-sharing platform Rumble, which hosts U.S. President Donald Trump's Truth Social, and a brain-chip implants business, plus a stake in Italy’s Juventus football club.

SUPPLY DISAGREEMENT
A promotional video posted by ‌Tether on X in ⁠February 2024 of its nascent Uruguay operations showed rows of small buildings, with fans on top and computing hardware inside. Farmland surrounds the site, characteristic of the rural department of Florida, with wind turbines in the background.

Road signs around the buildings play on crypto jargon, such as “Memepool Avenue” and “Halving Street”, according to the video, which was verified by Reuters.

Initially well run, the site's operations generated income, the two former Tether contractors said.

Then the project began to unravel over a fundamental disagreement about electricity supply with state utility UTE, the two former contractors and a source at UTE said.

Tether believed a clause in its contract with UTE represented a minimum level of power supply that could later be increased — but UTE viewed the contracted amount as a maximum allocation that could not be exceeded, one of the former contractors said.

Sources at UTE also said the disagreement was over how much electricity Tether’s local legal entity Microfin was entitled to.

The dispute had begun by November 2024, according ​to an internal briefing UTE compiled in 2025 for its own staff ​that Reuters reviewed.

Insufficient power was a serious problem. As demand at the ⁠mining plants rose, Tether was short of supply, leaving the site without sufficient electricity for days at a time, the former contractor said.

Tether and Microfin did not respond to requests for comment on the UTE contract.

The first ex-contractor and a third source said the dispute had been compounded by a shift in Uruguay’s political landscape. A left‑leaning government took office in March 2025 and appointed new directors at UTE. The firm took a harder line on allowing Tether to renegotiate ​the energy supply contract, the contractor said.

Two months after the new government took office, Microfin stopped paying its electricity bills and then told UTE in June 2025 it would terminate its contracts, the UTE document shows.

Both sides ​sought to salvage the deal by agreeing to ⁠a revised contract, the UTE briefing notes show. The utility’s board approved a memorandum of understanding and revised contract texts, but Tether representatives did not attend the signing, according to the minutes in the briefing.

With the memorandum unsigned and unpaid bills, UTE cut power to the mining sites on July 25, according to the UTE document.

Tether told Uruguay’s labor authorities on November 25 that it would cease operations and lay off most staff, local newspaper El Observador reported.

Microfin settled its outstanding debts in December, UTE told Reuters.

SWITCH TO AI
The Uruguayan deal collapsed as Tether has sought to position bitcoin mining as a key part of its global investment portfolio.

But bitcoin mining has become less profitable, ⁠analysts say, hit by ​a pre-programmed reduction in the bitcoin rewards available — called the “halving” — in April 2024, as well as a sharp drop in bitcoin’s price from a peak in 2025.

To stay afloat, bitcoin miners have ​tried strategies including buying more efficient hardware, seeking cheaper energy, or using their computer power for AI and high-performance computing instead, said Tanay Ved, senior research analyst at Talos.

Crypto mining expert Nicolas Ribeiro described the industry as “extremely dynamic,” with operators opening, closing and relocating constantly.

Uruguay’s strengths — a reliable power grid and strong internet connectivity — are better suited to data centers for AI because mining hinges ​almost entirely on access to cheap electricity, Ribeiro added. Uruguay is a leader in renewable energy, but its power costs are relatively high.

“Uruguay isn’t viable for mining — that’s the reality,” he said.

Europe’s crackdown on Tether’s USDT is entering a new phase.

When Revolut told European users it would delist USDT after Aug. 31, it became another in a long line of European platforms restricting access to the world’s largest stablecoin as firms adapt to the requirements of the EU’s Markets in Crypto-Assets (MiCA) regulation.

MiCA’s stablecoin rules have been phasing in since 2024, and the EU-wide transition period ended on July 1, putting further pressure on platforms to drop tokens that don’t meet the rules.

Yet according to Artemis Analytics, Tether being squeezed out of a major market has shown little sign of triggering a major shift in USDT activity. Alex Weseley, research and data, tells Magazine:

“The data does not indicate any noticeable change in USDT supply or demand attributable directly to MiCA coming into effect in Europe… MiCA didn’t trigger a major venue or chain migration.”So why is demand for Tether holding up so well?

Stablecoins become financial infrastructureOne reason USDT demand is proving resilient is that dollar stablecoins are being used for more than trading or saving in other regions of the world.

In Argentina, for example, a country long obsessed with stuffing dollars into mattresses and storing wealth outside the traditional financial system, stablecoin activity has continued to grow even though restrictions on accessing actual US dollars have eased.

USDT supply share by chain at MiCA milestones. Source: Artemis.

Lemon, an Argentine crypto and financial services platform, processed $9.3 billion in total volume in 2025, up 60% from the previous year. Transactional users grew 70% to nearly 1.8 million and stablecoin volume grew 45% year-on-year.

That suggests stablecoins are doing more than simply filling a gap created by restrictions on access to dollars; they’re becoming part of the way people move and spend money.

Ignacio Gimenez, Lemon’s business and planning manager, tells Magazine:

“The role of USDT and other dollar stablecoins is evolving. What we’re seeing is a shift from stablecoins as a store of value to stablecoins as financial infrastructure.”He says stablecoin activity is “increasingly driven by payments, cross-border transfers and global financial services rather than only by savings,” adding that Argentine users can pay in Brazil through PIX using pesos, receive dollars or euros from overseas and have them credited as USDC, or move between bank dollars and digital dollar balances.

That makes stablecoin demand harder to measure by simply looking at which tokens are available on regulated exchanges.

MiCA is changing the European gatewayLemon’s experience highlights a shift in user behavior in one of Latin America’s biggest economies, and there are signs that emerging markets are beginning to follow the trend.

Artemis data shows the number of daily users on Binance Smart Chain rose from about 318,000 in June 2024 to 1.56 million by July 2026, while daily users on Tron increased 44% to around 908,000. These chains are favored by day to day stablecoin users for their low fees. Weseley says:

“That looks like expanding global and emerging market usage rather than a Europe-specific migration, and there’s no clear MiCA-timed break in the chain data.”That doesn’t mean MiCA is irrelevant: it is certainly changing which stablecoins regulated European platforms can offer, and reshaping the stablecoin market inside the bloc.

USDT daily active addresses by chain at MiCA milestones. Source: Artemis.

Maksym Sakharov, chief executive and co-founder of WeFi, a crypto financial infrastructure company, says that regulation is primarily changing how users access dollar stablecoins, rather than removing the underlying demand, whether it’s for trading, payments, or cross-border transfers. He tells Magazine:

“Users do not choose a stablecoin only because it is available on one regulated platform. They choose it because counterparties use it, liquidity is deep, and it works across many markets.” For some platforms, the shift began well before the MiCA deadline. Chief executive of OKX Europe, Erald Ghoos, says OKX has not offered USDT to European users for around two years, so the latest MiCA deadline did not make much material difference.

Europe’s alternatives have a dollar problemPerhaps the bigger question in Europe is what European users will embrace instead. Dollar-denominated stablecoins have a powerful advantage since the crypto market has always treated the greenback as its primary benchmark.

USDT transfer volume share by chain pre vs. post MiCA. Source: Artemis.

While Ghoos doesn’t expect that to change globally any time soon, he says that institutional interest in euro-denominated stablecoins is picking up. He says:

“What we are seeing from institutional players is interest in creating more EUR-denominated stablecoins, which is worth watching as it develops.” For retail users, euro-denominated stablecoins could also make practical sense by removing additional friction, like currency conversion, from transactions. But while MiCA may determine which products are available through regulated European gateways, it cannot change the dollar’s role in global crypto markets.

Magazine: El Salvador’s Bitcoin experiment turns 5: ‘It was for us, not them’

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The GENIUS Act mandates Treasury bill reserves. FASB wants stablecoins counted as cash. The Treasury is writing enforcement rules for January 2027. Every provision points the same direction, and it is not toward protecting retail investors.

Summary

The GENIUS Act requires payment stablecoin issuers to hold reserves in U.S. Treasury bills, insured bank deposits, or Treasury repurchase agreements, turning every compliant stablecoin into a vehicle for dollar denominated sovereign debt distribution. Tether holds approximately $98 billion in U.S. Treasury bills as of its latest attestation, a position larger than the sovereign Treasury holdings of all but 18 countries, making a single stablecoin issuer one of the largest buyers of American government debt. FASB proposed three tests for stablecoins to qualify as cash equivalents on corporate balance sheets: redemption at par within one business day, reserves in low risk liquid assets, and independent attestation, codifying dollar stablecoins into the accounting system that underpins corporate finance. The U.S. Treasury published proposed rules on August 17 defining when payment stablecoins are issued, offered, or sold in the United States, with enforcement beginning January 2027, creating a compliance perimeter that favors dollar issuers with American banking relationships. The dollar’s share of global central bank reserves has declined from 72% in 2000 to roughly 57% in 2025, and stablecoins now circulate in countries where physical dollars and correspondent banking relationships have historically been difficult to maintain. The debate over stablecoin regulation in Washington has been framed, from the first hearing to the most recent markup, as a question of consumer protection. Are reserves adequate? Can holders redeem at par? Is the issuer solvent? These are the questions that legislators ask in public, the questions that lobbyists answer in testimony, and the questions that journalists use to structure their coverage.

They are also the wrong questions.

Consumer protection is a real concern. Tether operated for years without a credible audit. Terraform Labs marketed a stablecoin that collapsed to zero. Several smaller issuers have frozen redemptions during market stress. The history of the sector provides ample reason for regulation. But the legislation that Congress has actually written, the rules that regulators have actually proposed, and the accounting standards that the Financial Accounting Standards Board has actually drafted do not primarily address consumer harm. They address something else entirely.

Every major provision in the stablecoin regulatory stack points in the same direction: extending the reach of the U.S. dollar into financial infrastructure where it has historically been absent. The reserve requirements mandate Treasury bill purchases. The accounting rules fold stablecoins into the corporate cash system. The Treasury’s enforcement definitions create a compliance perimeter that structurally advantages dollar issuers. The pattern is consistent, and it has nothing to do with whether a retail investor in Lagos can redeem one USDT for one dollar.

The reserve requirement is a Treasury bill purchase mandate The GENIUS Act, which President Biden signed in June 2026, requires payment stablecoin issuers to back their tokens with a narrow set of eligible assets: U.S. Treasury bills with a remaining maturity of 93 days or less, insured deposits at FDIC member banks, or overnight Treasury repurchase agreements. The list is short, specific, and unmistakable in its effect.

When a stablecoin issuer mints a token, it must purchase one of these assets. When the stablecoin market grows, Treasury bill demand grows with it. The total stablecoin market capitalization crossed $178 billion in August 2026. If every dollar of that market were held in compliant reserves, stablecoin issuers would collectively hold more short term Treasury debt than the central banks of most G20 nations.

This is not an unintended consequence. The Treasury’s proposed rules for implementing the GENIUS Act, published on August 17, explicitly define the compliance perimeter around these reserve assets. The rules specify what counts as being “issued, offered, or sold in the United States,” creating a jurisdictional trigger that pulls any stablecoin with American users into the reserve mandate.

The effect is that stablecoin growth becomes synonymous with Treasury bill demand. Every new dollar of stablecoin issuance finances the U.S. government at the short end of the yield curve. In a period when the Treasury faces record refinancing needs and foreign central bank purchases of American debt have slowed, stablecoin issuers are becoming a structural buyer that did not exist a decade ago.

Tether is already a sovereign scale Treasury buyer The scale is not theoretical. Tether, which issues USDT with a market capitalization of approximately $119 billion, reported holding $98 billion in U.S. Treasury bills in its most recent quarterly attestation. That figure places Tether’s Treasury position above the sovereign holdings of Germany, Saudi Arabia, South Korea, and every other country outside the top 18 holders of American government debt.

This has happened without legislation. Tether moved into Treasury bills voluntarily, partly to improve the credibility of its reserves and partly because short term Treasuries offer a risk free yield that generates billions in annual revenue. The company reported $5.2 billion in net profit for the first half of 2025, almost entirely from Treasury bill interest.

JUST IN: Stablecoin issuers have two years to become compliant under GENIUS Act

July 2028 marks the deadline when non compliant stablecoins can no longer be offered to U.S. users pic.twitter.com/PsPyra0yXp

— crypto.news (@cryptodotnews) July 20, 2026 What the GENIUS Act does is make Tether’s voluntary choice mandatory for everyone else. Circle, which issues USDC, already holds reserves primarily in Treasury bills and money market funds. RLUSD, Ripple’s stablecoin, which recently crossed $1.71 billion in circulating supply, will need to comply with the same requirements. World Liberty Financial, the Trump affiliated entity that received an OCC bank charter for its USD1 stablecoin, is building its reserve structure around the mandate from inception.

The net result is a financial system in which private companies issue dollar tokens backed by government debt, distributed through crypto rails to users who may never open a U.S. bank account or interact with a correspondent bank. The dollar extends its reach without the Federal Reserve printing a single additional banknote.

FASB is folding stablecoins into the cash system On August 19, the Financial Accounting Standards Board proposed three tests for stablecoins to qualify as cash equivalents on corporate balance sheets. The tests require: redemption at par within one business day, reserves held in low risk liquid assets, and independent attestation of those reserves on at least a quarterly basis.

The proposal sounds like consumer protection. It reads like consumer protection. But its primary effect is to integrate dollar stablecoins into the accounting infrastructure that every public company, auditor, and financial institution in the United States relies on.

Under current accounting rules, companies that hold stablecoins must classify them as intangible assets, mark them down when their value drops, and cannot mark them back up when the value recovers. This treatment makes stablecoins impractical for corporate treasury management, regardless of how stable they actually are. The FASB proposal would eliminate this barrier for tokens that meet the three tests.

The implications run deeper than corporate convenience. If stablecoins qualify as cash equivalents, they become fungible with dollars in the accounting systems of every company that adopts the standard. A corporation holding $50 million in USDC could report it on the same line as $50 million in a JPMorgan Chase money market account. The distinction between a dollar in a bank and a dollar in a stablecoin would narrow to the point of irrelevance for financial reporting purposes.

This matters for dollar hegemony because it embeds stablecoins into the institutional plumbing that makes the dollar the default currency of global commerce. Corporate balance sheets are not abstractions. They determine which currencies companies hold, which currencies they pay suppliers in, and which currencies they receive revenue in. When stablecoins become cash equivalents, the dollar gains distribution channels that are cheaper, faster, and more accessible than traditional banking.

The compliance perimeter favors American issuers The Treasury’s proposed rules define when a stablecoin is considered to be issued or sold “in the United States.” The definitions matter because they determine which issuers fall under American regulatory authority and, by extension, which issuers can serve American users and access American financial infrastructure.

NEW: GENIUS Act stablecoin rules deadline missed by U.S. regulators

The legislation will still activate in January 2027 despite incomplete finalization pic.twitter.com/t3JdMON7xJ

— crypto.news (@cryptodotnews) July 19, 2026 The rules create a compliance perimeter that structurally favors issuers with existing U.S. banking relationships. A company like Circle, which is headquartered in Boston and holds reserves at Bank of New York Mellon, is already inside the perimeter. A company like Tether, which is incorporated in the British Virgin Islands and maintains banking relationships through non U.S. institutions, must restructure its operations to comply or risk being classified as a non compliant issuer whose tokens American financial institutions cannot hold.

This is dollar policy, not consumer policy. A non compliant stablecoin and a compliant stablecoin may offer identical consumer protections. Both may hold 1:1 reserves in Treasury bills. Both may offer instant redemption. But only the compliant issuer can be held on the balance sheets of American banks, treated as a cash equivalent by American corporations, and cleared through American payment rails. The compliance perimeter does not protect consumers from loss. It protects the dollar from competition.

The euro and yuan alternatives are being designed out of the race Circle’s euro stablecoin EURC crossed 400 million euros in circulation in August 2026. That figure represents less than 0.3% of USDC’s market capitalization. The disparity is not an accident of market preference. It is a structural outcome of how stablecoin regulation has been designed.

The GENIUS Act does not prohibit non dollar stablecoins. But it creates a reserve and compliance framework that is built around dollar denominated assets, American regulatory institutions, and U.S. banking infrastructure. An issuer of a euro stablecoin must comply with the same framework if its tokens are used by American residents, but its reserves must be held in euro denominated assets that do not generate the same regulatory advantages as Treasury bills.

China’s digital yuan and the European Central Bank’s digital euro represent the clearest alternative visions. Both are central bank digital currencies rather than privately issued stablecoins. Both are designed to reduce dependence on the dollar in cross border payments. But neither has achieved meaningful adoption outside domestic pilot programs.

The American approach is different. While the CLARITY Act’s odds have collapsed to 10% and broader crypto legislation stalls, stablecoin regulation has moved forward at speed. Rather than issuing a government CBDC, the United States has chosen to regulate private stablecoin issuers in a way that turns them into dollar distribution agents. The advantages are significant: private issuers innovate faster than central banks, they absorb the operational risk of running payment infrastructure, and they create demand for government debt through the reserve mandate. The disadvantage is that the government depends on private companies to maintain the integrity of the system, which is why the consumer protection language exists, even if it is not the primary purpose of the legislation.

Wyoming’s FRNT, a state issued stablecoin that recently migrated from LayerZero to Chainlink for its cross chain infrastructure, represents a hybrid model. It is government issued but uses private blockchain rails. The experiment is worth watching, but at its current scale it does not challenge the fundamental dynamic: stablecoin regulation is designed to extend dollar reach through private issuers, not to replace them with government alternatives.

The January 2027 enforcement deadline The GENIUS Act’s key enforcement provisions take effect in January 2027. After that date, non compliant stablecoin issuers face restrictions on access to the U.S. financial system. The Treasury’s proposed rules, now in a public comment period, will determine exactly how those restrictions are applied.

The deadline creates a compliance race. Issuers that want to serve American users, or whose tokens are held by American institutions, must restructure their reserves, obtain the necessary licenses, and submit to the attestation requirements before January. For Circle and other U.S. based issuers, compliance is largely a formalization of existing practices. For Tether, which has operated outside the U.S. regulatory perimeter for its entire existence, the deadline represents a strategic choice: comply and accept American oversight, or accept exclusion from the American financial system.

The consequences of exclusion are not symmetric. An issuer locked out of the U.S. system loses access to the largest capital market in the world. But the dollar does not lose anything. A non compliant USDT that cannot be held by American banks or treated as a cash equivalent by American corporations will be replaced by a compliant alternative. The demand for dollar stablecoins does not disappear when Tether is excluded. It migrates to Circle, to RLUSD, to USD1, or to whatever new issuer fills the gap.

This is the clearest signal of the legislation’s true purpose. A consumer protection framework would focus on ensuring that all stablecoin holders, regardless of which token they hold, can redeem at par. The GENIUS Act does that, but it also creates a two tier system in which compliant issuers gain access to American infrastructure and non compliant issuers do not. The tier that matters is the infrastructure tier, not the redemption tier.

The dollar’s distribution problem The dollar’s share of global central bank reserves fell from 72% in 2000 to roughly 57% in 2025, according to IMF data. The decline is gradual, not dramatic, and the dollar remains the dominant reserve currency by a wide margin. But the trend concerns policymakers because it reflects a structural shift: countries are diversifying into euros, yuan, gold, and other assets, and the correspondent banking system that distributes dollars globally has become more expensive and more restricted.

Stablecoins solve the distribution problem. A merchant in Lagos, a freelancer in Manila, or a small business in Sao Paulo can hold dollar stablecoins without a bank account, without a correspondent banking relationship, and without paying the fees that international wire transfers impose. The stablecoin is the dollar in a format that is cheaper to move, easier to access, and available 24 hours a day.

LATEST: 🇺🇸 Coinbase stablecoin revenue could surge 7x under Genius Act, but draft bill may restrict this growth by banning yield payments to holders, per Bloomberg. pic.twitter.com/KypHu86PSB

— crypto.news (@cryptodotnews) February 24, 2026 The regulatory framework ensures that this distribution channel remains tied to the American financial system. The reserve mandate ensures that every stablecoin is backed by Treasury debt. The FASB rules ensure that stablecoins are treated as dollars by the accounting system. The compliance perimeter ensures that the issuers who control the largest distribution networks operate under American oversight.

The consumer protection language is real, and the protections it provides are genuine. Holders of compliant stablecoins will have stronger redemption rights, clearer disclosure, and more reliable reserves than they do today. But the architecture of the system is designed to solve a problem that has nothing to do with consumer harm and everything to do with maintaining the dollar’s position as the world’s reserve currency in a decade when that position is under more pressure than at any point since Bretton Woods.

What to watch The Treasury’s comment period on GENIUS Act rules. Public comments close in October. The final rules will determine how strictly the compliance perimeter is enforced and whether non U.S. issuers receive a realistic path to compliance.

Tether’s compliance strategy. The company has not publicly committed to full GENIUS Act compliance. Any announcement of a U.S. entity, U.S. banking partner, or restructured reserve framework would signal that Tether views exclusion as an unacceptable business risk.

FASB’s final vote on the cash equivalents proposal. If adopted, the standard would take effect for fiscal years beginning after December 15, 2027. Early adoption would be permitted, and major technology companies with existing stablecoin exposure would likely adopt immediately.

Non dollar stablecoin issuance volume. If EURC, HKDAP, or other non dollar stablecoins grow faster than dollar stablecoins in the 12 months following the GENIUS Act’s enforcement date, it would suggest that the regulatory framework is pushing activity offshore rather than capturing it.

Central bank digital currency timelines. The ECB has targeted 2028 for a possible digital euro launch. Any acceleration or delay will affect whether dollar stablecoins face a serious competitor in the payments layer.

What is the GENIUS Act? The Guiding and Establishing National Innovation for U.S. Stablecoins Act is a federal law signed in June 2026 that creates a regulatory framework for payment stablecoins. It defines reserve requirements, licensing obligations, and consumer protections for stablecoin issuers operating in or serving users in the United States.

Why do stablecoin reserve requirements matter for the dollar? The GENIUS Act requires stablecoin reserves to be held in U.S. Treasury bills, insured bank deposits, or Treasury repurchase agreements. This means every dollar of stablecoin growth generates demand for dollar denominated government debt, turning stablecoin issuers into structural buyers of Treasury securities.

How much U.S. Treasury debt do stablecoin issuers hold? Tether alone holds approximately $98 billion in Treasury bills, a position larger than the sovereign Treasury holdings of most G20 nations. Combined with Circle’s reserves and other issuers, the stablecoin sector holds well over $130 billion in short term U.S. government debt.

What happens to Tether under the new rules? Tether must comply with the GENIUS Act’s requirements by January 2027 or face restrictions on access to the U.S. financial system. The company has not publicly committed to full compliance, and its incorporation in the British Virgin Islands complicates the path to meeting U.S. regulatory standards.

Can non dollar stablecoins compete under this framework? Technically yes, but the framework is structurally designed around dollar denominated assets and U.S. regulatory institutions. Non dollar stablecoins must comply with the same rules if they serve American users, but their reserves cannot generate the same regulatory and financial advantages as dollar backed tokens.

Is the United States building a central bank digital currency instead? No. The current U.S. approach relies on regulating private stablecoin issuers rather than issuing a government CBDC. This strategy allows private companies to handle operations and innovation while the government maintains oversight through reserve mandates and compliance requirements.

How does stablecoin regulation affect people outside the United States? Stablecoin regulation extends dollar access to users in countries where physical dollars and traditional banking are difficult to obtain. A merchant or freelancer in an emerging market can hold dollar stablecoins without a bank account, effectively joining the dollar system through crypto rails rather than correspondent banking. This is educational analysis, not investment advice.

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or investment advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions. Information is accurate as of August 19, 2026.

Tether announced Thursday that KPMG U.S. completed the company's first full independent financial statement audit, issuing an unqualified opinion on Tether International's 2025 financials and confirming that reserves backing USDT exceeded liabilities by $6.814 billion at year-end.

The distinction between this and what Tether has published before matters more than the headline number. Attestations, which Tether has relied on since 2021, are limited to a snapshot in time, built on a scope the company itself defines, and carry no binding opinion from the accounting firm performing them. A full audit is different in kind: KPMG examined Tether's complete financial statements, transactions, systems, valuations, counterparties, and ownership records, and — notably — physically counted and inspected every individual gold bar Tether holds, verifying existence and identifying information directly rather than relying on custodian reports. The audit covered a balance sheet that includes more than $141 billion in direct and indirect US Treasury exposure, alongside gold and roughly $60 billion in bitcoin, according to Arkham Intelligence data cited by outlets covering the announcement; Tether's own statement did not break out its bitcoin position. CEO Paolo Ardoino called it the "largest inaugural financial audit in history," and noted that critics had spent years insisting an audit of Tether's scale could never actually be completed.

The audit result gave both sides of Tether's long-running credibility debate something to point to. Supporters treated the $6.8 billion surplus and KPMG's clean opinion as vindication after years of unresolved scrutiny. Critics were quicker to note that gold verification, however thorough, addresses only one reserve category, and that KPMG's own network has previously audited firms that later collapsed under fraud allegations — a reminder that a clean audit opinion narrows the range of open questions without eliminating all of them.

The credibility question Tether just answered first became unavoidable in October 2024, where we covered a public accusation that Tether was "a $120 billion scam" with no audit ever completed — a claim that gained traction precisely because it was, at the time, factually true: no independent audit existed, only quarterly attestations Tether itself commissioned. That gap persisted even as Tether pursued a US-facing pivot, with Blockhead reporting last September that Tether launched USAT, a dollar stablecoin built for American compliance through Anchorage Digital, after a 2021 New York Attorney General settlement first forced the company into a regime of quarterly attestations without an admission of wrongdoing. This audit is the step that gap-filling campaign had been building toward.

USDT's market capitalization has passed $180 billion, and Tether has become one of the largest private holders of US government debt globally — a scale where "trust us" stopped being a sufficient answer for regulators and institutional counterparties years ago. A single audit doesn't retroactively resolve every past criticism, and the audited entity is a Tether subsidiary rather than the parent company. But it does convert the central question that's followed Tether since 2017 — do the reserves actually exist — from something only Tether could answer into something a Big Four firm has now put its own name behind. Whether that's enough for the regulators still watching USDT's compliance status under the GENIUS Act, given Tether issues the token from outside the US, is the next question the audit alone can't settle.

The tokenized gold market just had a very good month. Gold-backed assets across tokenized commodity markets grew by more than $362 million over the past 30 days, with Tether Gold (XAUT) responsible for $237 million of that increase, roughly two-thirds of the total gain.

XAUT’s growing dominance
Tether Gold has climbed to a market cap of approximately $2.48 billion, with each token priced around $4,040. Each XAUT token is backed by one fine troy ounce of physical gold stored in Swiss vaults, meaning the token’s price essentially tracks spot gold.

The broader tokenized gold market sits somewhere between $5 billion and $6 billion in total capitalization as of 2026. XAUT and its closest competitor, Paxos Gold (PAXG), collectively account for between 93% and 97% of that total, depending on the measurement period.

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Why tokenized gold keeps growing
Tokenized gold market cap grew by 30% in Q1 2026, outpacing the growth rate of physical gold holdings during the same period. The tokenized versions have also attracted net new capital beyond what price appreciation alone would explain, suggesting genuine demand for the format rather than just passive exposure to the metal.

Traditional gold ownership comes with friction. Physical bullion needs secure storage and insurance. Gold ETFs require brokerage accounts and trade only during market hours. Tokenized gold lives on-chain, trades around the clock, and can be moved or used as collateral in DeFi protocols without waiting for a settlement cycle.

The competitive landscape
Tether’s position as the market leader in tokenized gold mirrors its dominance in the stablecoin market, where USDT remains the most widely held dollar-pegged token.

Paxos Gold operates under New York state regulatory oversight, which gives PAXG a compliance advantage that appeals to certain institutional buyers. The two tokens serve slightly different audiences, which helps explain why the market supports both rather than converging on a single winner.

The remaining 3% to 7% of market share is fragmented across smaller issuers, none of which have achieved meaningful scale. Breaking into this market requires not just a token, but a verifiable custody relationship with a recognized vault operator, transparent auditing, and enough liquidity to attract serious traders.

What to watch from here
The $237 million that XAUT added in a single month represents roughly a 10% increase relative to its current market cap.

On the regulatory side, several major jurisdictions have moved toward frameworks that explicitly address tokenized securities and commodities. Clearer rules could unlock institutional capital that has been sitting on the sidelines before allocating to on-chain gold products.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.

Cover image via depositphotos.com Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.

Strategy chairman Michael Saylor, who had championed uncompromising Bitcoin maximalism for years, has made an unexpected compromise with the fiat world. The entrepreneur unveiled the concept of a multi-layered Digital Finance Stack, in which the USDT stablecoin has, for the first time, been officially designated as the ecosystem's primary transactional gateway.

The new architecture clearly distributes assets across the monetary spectrum: from volatile Bitcoin on the left flank to stable fiat payment instruments on the right.

How Saylor plans to supercharge Bitcoin with USDTWithin this framework, Bitcoin is assigned exclusively the role of "heavy" digital capital and the ultimate defensive asset. To directly address Bitcoin's limited transactional utility, the largest corporate holder of the cryptocurrency has unexpectedly integrated Tether's USDT into the model.

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This zero-volatility instrument is intended to fully meet the market's need for fast, everyday payments.

Michael Saylor's Bitcoin-centered Digital Capital framework, Source: Michael Saylor via X.comServing as a bridge between them are new structured financial-engineering products developed by Strategy itself. These include STRC, a semi-stable, fixed-income credit instrument represented by the company's Bitcoin-backed preferred stock, and SR-strcUSX, a hybrid token created for the sole purpose of combining the stability of fiat currency with debt-market yields.

The top layer of this system is Digital Equity, which connects all levels of the framework into a single business. 

You can live on Bitcoin. You can also build on it. Crude oil is valuable, but civilization gets more utility by refining it into gasoline, jet fuel, plastics, lubricants, and asphalt. Bitcoin is Digital Capital. Innovation turns capital into credit, money, and currency.

— Michael Saylor (@saylor) August 13, 2026 Under Saylor's vision, fintech companies will be able to earn revenue by managing these payment and credit instruments, while investors will receive a share of their earnings by purchasing equity.

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Saylor's theoretical framework has emerged at a moment of severe stress testing for Strategy's actual balance sheet. The company's latest reports showed that it had broken its "never sell" rule, liquidating 6,948 BTC worth $432.5 million this summer to pay dividends and maintain liquidity. The sale came as the STRC preferred stock was trading below its $100 par value.

Although CEO Phong Le said this week that Strategy expects to return to net Bitcoin purchases by the end of 2026, Saylor's new concept clearly shows that the company is attempting to transform its massive reserve of 840,447 BTC from a passive and volatile burden into an active commercial fintech instrument.

TLDR The USDT stablecoin issuer acquired approximately 27 metric tons of gold during H1 2026, equaling Kazakhstan’s central bank accumulation The precious metal climbed 0.7% to roughly $4,400 per ounce in anticipation of U.S. inflation figures According to Jefferies research, Tether has emerged as “a meaningful source of incremental physical gold demand” The People’s Bank of China extended its gold buying streak to 21 consecutive months in July, purchasing approximately 640,000 troy ounces The yellow metal confronts critical resistance between $4,460 and $4,495, with analysts eyeing $5,000 as the subsequent major milestone The precious metals market is experiencing upward momentum, driven significantly by an unexpected cryptocurrency player and China’s persistent accumulation strategy.

The stablecoin giant behind USDT accumulated over 27 metric tons of the precious metal during the initial six months of 2026. This volume places the company alongside Kazakhstan in the rankings, trailing only Poland, Uzbekistan, and China among the year’s most significant institutional purchasers.

🔥Tether has quietly become one of the world's largest gold buyers:

Tether's gold reserves have increased by ~85 metric tons since Q1 2025, a larger increase than those of Uzbekistan, China, Brazil, or Kazakhstan.

TAP IMAGE TO SEE FULL INSIGHT👇https://t.co/dt5dUkeNoF

— Global Markets Investor (@GlobalMktObserv) August 12, 2026

The rationale behind Tether’s gold acquisitions mirrors traditional central bank strategies. The company seeks portfolio diversification while creating a buffer against inflationary pressures and U.S. dollar depreciation. Given that USDT maintains a peg to the greenback, currency weakness presents direct operational risks.

Research from Jefferies indicates that Tether’s purchasing activity has contributed to the precious metal’s summer rally. Current trading levels hover around $4,420 per ounce, representing approximately 12% appreciation from the early July trough near $4,000.

“Tether is no longer a niche participant, but a meaningful source of incremental physical gold demand,” the Jefferies analysts wrote.

Beyond physical holdings, Tether operates a blockchain-based gold product called Tether Gold, which digitizes ownership rights to physical bullion. The firm’s Q2 Tether Gold reserves increased 9.5% compared to Q1 levels.

According to CEO Paolo Ardoino, investors aren’t simply chasing price appreciation. Instead, they’re strategically accumulating during market corrections through an instrument that offers “fully backed, transparent, portable, and accessible on-chain” exposure.

Precious Metal Gains Momentum Before Critical Inflation Release Spot gold advanced 0.7% to approximately $4,400 per ounce Wednesday as market participants positioned ahead of the Consumer Price Index announcement. The inflation data will likely influence Federal Reserve policy direction.

Interest rate swap markets currently price in roughly even odds for a 25-basis-point rate increase in September. Lower-than-expected inflation could reduce pressure for tightening, whereas elevated readings might strengthen hawkish expectations.

Saxo Bank strategists noted that market participants are monitoring whether the rally above $4,200 possesses sufficient strength to test resistance near $4,460 and the 200-day moving average around $4,495. Clearing these technical barriers could establish a trajectory toward $5,000.

Exchange-traded fund flows into gold products have maintained momentum for five consecutive sessions, elevating aggregate holdings to their highest point in six weeks.

Middle East Instability and Persistent Chinese Demand Bolster Prices Escalating friction surrounding the Strait of Hormuz continues affecting energy markets while providing underlying support for safe-haven assets. Iranian officials maintain the critical shipping lane will remain blocked until Washington removes restrictions on Iranian port access. Elevated energy costs could accelerate inflation, potentially constraining the Fed’s flexibility on rate cuts.

The People’s Bank of China maintained its unbroken purchasing pattern in July, marking the 21st consecutive month of additions and lifting total reserves to 76.08 million ounces. Chinese gold-backed exchange-traded products similarly continued drawing capital inflows.

Tether’s gold accumulation strategy persists despite Bitcoin declining over 25% year-to-date, while Ethereum and Solana have each dropped nearly 40%.

Producer price index data scheduled for Thursday will provide markets with additional inflation insights ahead of the Federal Reserve’s upcoming policy meeting.

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The cryptocurrency market is bleeding liquidity at a pace not seen in over a year. Data from CryptoQuant, covered by WuBlockchain, shows that Tether’s USDT supply has contracted by approximately $4 billion over the past 60 days. The decline accelerated sharply in the last 11 days, with an $870 million drop alone. That’s not just a rotation; it’s an outright reduction in the amount of dollar-pegged capital sitting on exchanges and DeFi platforms.

Analyst Stacy Muur interpreted the outflows as a signal that some investors are cashing out of crypto entirely, converting stablecoins back to fiat rather than holding them for re-entry. While profit-taking is a standard part of any cycle, the magnitude and speed of this exodus suggest broader fatigue. Stablecoin yields might be contributing too. With real-world asset yields rising and on-chain opportunities compressing, the opportunity cost of keeping dry powder in crypto has increased. The tokenized Treasury market recently surpassed $20 billion, indicating that yield-seeking capital has alternative destinations without leaving blockchain rails entirely.

Liquidity contraction and market implications This decline in USDT supply is not just an abstract metric. Stablecoins function as the lifeblood of crypto markets, providing the quote currency for the vast majority of spot and derivatives trading pairs. A $4 billion reduction in outstanding supply means less purchasing power available to absorb sell pressure. Historically, falling stablecoin balances on exchanges have correlated with declining asset prices and lower trading volumes. The current environment already shows thinning order books across major venues. If the trend continues, even positive catalysts may struggle to translate into sustained upward moves.

The yield environment is a crucial backdrop. Stablecoin users who don’t deploy capital into lending protocols earn nothing on their holdings. With the Federal Reserve keeping rates high, the lost yield on idle USDT is costly. The explosive growth in tokenized real-world assets proves that capital can earn a Treasury-adjacent return entirely on-chain. That shift may be cannibalizing traditional stablecoin demand, as investors treat stablecoins less as a parking spot and more as a temporary settlement layer before moving into yield-bearing instruments.

The specific timing is notable. Mid-July through early August has been marked by sideways price action in bitcoin and ether, along with a prolonged period of negative sentiment. Into that weakness, investors are choosing to exit rather than rotate into perceived safe havens like bitcoin. The speed of the outflows—$870 million in under two weeks—indicates that the decision to leave is not confined to small retail traders. That kind of volume suggests institutional or high-net-worth players are moving funds.

Regulatory headwinds and institutional caution The outflows coincide with a fraught moment for US crypto regulation. A landmark crypto bill faces fierce opposition from banking interests days before a Senate vote. That uncertainty can push risk-averse capital to the sidelines. Tether itself has navigated a series of regulatory and transparency challenges over the past year, and while no new enforcement action is behind this supply drop, the lingering perception of stablecoin risk could accelerate a flight to quality that bypasses crypto altogether.

Meanwhile, the broader institutional landscape is not uniformly bearish. Institutional staking and fintech integrations continue to drive demand for specific Layer-1 tokens. That divergence—where capital exits stablecoins but chases select altcoins—complicates the narrative of a wholesale crypto exit. It points instead to a market that’s becoming more differentiated between conviction sectors and everything else.

What remains unresolved There’s no clear data on whether the USDT supply drop reflects redemptions at Tether’s corporate level or simply a reduction in exchange-held balances. The two have very different implications. Direct redemptions would shrink the overall Tether market cap, indicating Treasury bill-backed dollars were removed from the system. A decline in exchange holdings, on the other hand, could simply mean USDT migrated to self-custody or DeFi protocols where it’s less visible in exchange metrics. That nuance matters when judging the true level of exit. The data so far cannot distinguish between these scenarios.

What is certain is that the market is less liquid than it was in early June. If a sudden spike in volatility hits, the thinner stablecoin cushion could amplify price swings in either direction. Crypto’s structural dependence on a handful of stablecoin issuers means these supply contractions deserve close monitoring. A prolonged or accelerating decline would be one of the most reliable signals that capital is meaningfully leaving the asset class, not just rotating within it.

AUTHOR

With over five years of experience in crypto, blockchain, and tech content, Ishtiyaq makes complex topics easy to understand. He simplifies blockchain and digital currency concepts for a wide audience, ensuring that beginners and experts alike can grasp key ideas. His clear and engaging writing helps readers stay informed about the latest trends, developments, and innovations in the crypto space. Whether explaining blockchain technology, digital assets, or DeFi, Ishtiyaq breaks down complicated ideas into simple, digestible content. His goal is to help people navigate the fast-changing world of cryptocurrency with confidence, clarity, and a deeper understanding.

Cover image via depositphotos.com Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.

At the start of the new week, two major treasury transactions were recorded in the stablecoin market, clearly illustrating the division of digital capital into two parallel and non-overlapping directions.

According to on-chain tracker, Ripple carried out a scheduled issuance of $10 million in RLUSD stablecoins on the XRP Ledger. Almost simultaneously, Tether conducted a routine issuance of $1 billion in USDT on the Tron blockchain, increasing its treasury inventory on the network to $91 billion.

The difference in volume is explained by the fundamentally different business models of the two issuers. 

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With its enormous turnover, Tether serves the needs of the mass retail market and crypto trading, where immediate access to deep liquidity is critical.

Fresh $10 million RLUSD mint on XRP Ledger (XRPL) by Ripple, Source: XRP ScanRipple, in turn, is not attempting to compete in the mass-market segment. RLUSD currently has a market capitalization of $1.52 billion, approximately 20% below its May peaks, while the token is issued selectively to meet specific B2B requests from commercial companies through the Ripple Mint platform.

Whales defend $1 XRP floor as Ripple injects fresh capitalThe latest $10 million mint coincided with a major increase in large-investor activity on the spot market. While Ripple's treasury regulates the stablecoin's supply under NYDFS supervision, large holders, or whales, began aggressively moving funds and accumulated more than 380 million XRP over the past week.

These maneuvers unfolded around the psychologically important $1 level for XRP, which major players are defending as a key support level.

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Ultimately, these developments reflect the current status quo. While Tether retains its position as the main settlement instrument in retail crypto transactions, Ripple is testing its B2B product within the narrow corporate payments niche and undergoing technical adaptation as large investors build positions ahead of a potential breakout from the market's prolonged summer consolidation.

10h05 ▪ 5 min read ▪ by Fenelon L.

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Washington sanctioned Shelbit and Aban Tether on August 7, 2026, accusing the two crypto platforms of supporting financial networks linked to Iran. Behind these little-known names lies a network of companies, online betting, and wallets associated with the Revolutionary Guards.

In brief The OFAC listed Shelbit, Aban Tether, and several related persons and companies on its sanctions lists on August 7, 2026. The U.S. Treasury describes three categories of crypto transfers of more than 1 million, 2 million, and 2 million dollars around Shelbit, the IRGC, and Nobitex. Assets under U.S. jurisdiction are blocked, while actors continuing certain transactions face sanctions. Shelbit and Aban Tether enter OFAC’s crosshairs Shelbit was already under the spotlight before the American decision. Cointribune had recently documented the Shelbit dossier and its transfers to Binance, amid suspicions of money laundering and sanctions evasion. On August 7, Washington took a step further by directly listing the platform and its alleged operator in its sanctions framework.

In its press release published on August 7, 2026, the Office of Foreign Assets Control (OFAC), a branch of the U.S. Treasury responsible for enforcing economic sanctions, targets two platforms: Shelbit and Aban Tether. The agency also targets Siavash Kayvanpour, described as the head of a network of companies established notably in Georgia, the United Arab Emirates, and Poland.

The initial assessment reported by Cointelegraph mentions more than 5 million dollars in transfers detailed by the administration. However, the official statement distinguishes several movements: over 1 million dollars are said to have circulated from wallets controlled by the Islamic Revolutionary Guard Corps (IRGC) to Shelbit, more than 2 million from Shelbit to the IRGC, then over 2 million from addresses linked to Kayvanpour to Nobitex.

This breakdown does not allow to confirm that all these amounts represent entirely distinct funds.

Aban Tether follows a different mechanism. According to OFAC, this Iranian platform processed millions of dollars in transactions with Nobitex, Wallex, Bitpin, and Ramzinex, four Iranian exchanges already designated by Washington. The agency sanctions Aban Tether under its activity in the Iranian financial sector.

A network of companies and betting behind crypto flows The dossier goes beyond the two platforms displayed on the list. The Treasury describes Shelbit as the gateway for a vast network of Persian betting sites, run by two Iranian influencers convicted in 2023 for illegal gambling. Tens of millions of dollars from this group are said to have passed through Shelbit, while these sites retained access to the Iranian payment system.

Washington also links several companies to Kayvanpour: SHPS Shelbit in Georgia, Shelbit General Trading in the United Arab Emirates, Shelbit Technologies in Poland, as well as Crypto Home DMCC and NFT Home DMCC in Dubai. The Emirati regulator VARA had already taken measures against Shelbit General Trading in January 2025 and July 2026. Despite these interventions, the activity continued.

This offensive is part of a larger sequence. In May, Scott Bessent claimed that the United States had recovered one billion dollars of cryptos linked to Iran, without detailing all the operations involved. The new decision is therefore not an isolated strike: it expands American pressure to providers connecting wallets, local platforms, and commercial networks.

We will continue to increase economic pressure. Whether in dollars, rials, or crypto, the Treasury will track and dismantle illicit financial networks keeping the regime afloat.

Scott Bessent, U.S. Treasury Secretary The State Department also offers up to 15 million dollars for any information that can disrupt the IRGC’s and its branches’ financial mechanisms. This amount shows the priority given to monitoring these networks.

What the sanctions change for crypto actors Being listed on OFAC’s lists has immediate effects. Properties and interests held in the United States, or controlled by Americans, must be blocked and reported. The rule extends to entities owned 50% or more, directly or indirectly, by one or more sanctioned persons.

Restrictions do not stop at U.S. borders. Financial institutions and foreign companies can face sanctions if they conduct certain operations with designated persons. OFAC can also impose civil penalties based on strict liability without having to prove intent to circumvent rules.

This is the sensitive point for exchanges. Transfers on a public blockchain leave traces, but identifying real beneficiaries still depends on internal controls, customer data, and cooperation between authorities. A platform that maintains relationships with a sanctioned address or company can therefore see its access to banking partners and the U.S. market severely compromised.

In short, Washington tightens the noose on the infrastructure enabling funds to circulate, not just on their final holders. The designation of Shelbit, targeting of Aban Tether, and threat of secondary sanctions push intermediaries to review their controls. The risk of sanctions for maritime companies had already shown how far this exposure could extend. Now, crypto platforms are warned.

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Fenelon L.

Passionné par le Bitcoin, j'aime explorer les méandres de la blockchain et des cryptos et je partage mes découvertes avec la communauté. Mon rêve est de vivre dans un monde où la vie privée et la liberté financière sont garanties pour tous, et je crois fermement que Bitcoin est l'outil qui peut rendre cela possible.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

Tether, the issuer of the USDT stablecoin, has expanded its gold holdings significantly in the second quarter of 2026, acquiring 14 additional tonnes. This purchase brings Tether’s total gold reserves to 146 tonnes, valued at approximately $18.8 billion. As a result, Tether is now one of the largest private holders of gold outside of government entities and central banks. This substantial increase in gold holdings comes as the company looks to bolster the backing of its stablecoin, which remains the largest dollar-pegged currency in the market.

The move by Tether suggests a strategic decision to diversify and strengthen its reserve assets, with gold now representing about 10% of its $187.8 billion reserves. The acquisition may have implications for the broader gold market, as it indicates increased demand from private institutions. Analysts are observing how this development might influence gold prices, especially as market participants assess the potential impact on future gold price movements.

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Market data currently reflects limited immediate impact on gold reaching higher price thresholds by the end of December 2026. However, the acquisition by a major player like Tether could play a role in shaping market sentiment and expectations in the coming months.

Key Takeaways Tether’s acquisition of 14 tonnes of gold appears to suggest a strategic reserve diversification effort. This purchase positions Tether as a significant private holder of gold, potentially influencing market perceptions. Current market pricing suggests limited immediate expectations for gold to hit $15,000 by year-end. What to Watch Market participants will be closely watching central banks and other major institutional players for any similar moves that could further influence gold demand. Analysts will also monitor economic indicators such as Federal Reserve interest rate decisions and geopolitical developments that could impact gold prices. Should central banks increase their gold purchases or geopolitical tensions rise, this could be consistent with scenarios where gold prices move towards higher thresholds.

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Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.

A profitable quarter still ended with about half the buffer it started with, and the Big Four audit Tether commissioned in March has yet to produce an audited statement.

Original Image Credits: photodaria / Shutterstock.com

Posted August 3, 2026 at 8:31 am EST.

Tether reported roughly $1.5 billion in net operating profit for the second quarter on Friday, and disclosed in the same release that the cushion sitting between USDT holders and the company’s obligations had fallen to $4.11 billion, about half what it was three months earlier.

The BDO attestation puts total assets at $187.75 billion against $183.64 billion in liabilities as of June 30. Excess reserves stood just above $8.23 billion at the end of March. A quarter that generated $1.5 billion in profit therefore closed with roughly $4 billion less headroom than it opened with.

This story is an excerpt from the Unchained Daily newsletter.

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Gold and Bitcoin Did the Damage Profit and buffer moved in opposite directions because they sit in different parts of the balance sheet. Treasuries and repurchase agreements produced the earnings. The buffer absorbed markdowns on the assets Tether has spent two years accumulating. Gold slid about 15% to just over $4,000 an ounce, which cut the value of a bigger pile of metal to $18.84 billion from $19.84 billion. The bitcoin price used in the report dropped to $58,600 from $68,200, taking that position to $5.80 billion from $6.62 billion.

Tether bought through both declines, adding 14 tons of gold to reach 146.2 metric tons and about 1,796 BTC to reach 98,933. Those two holdings together now sit near $24.6 billion, close to 13% of total assets. Measured against the $184.6 billion of USDT in circulation, the remaining buffer works out at roughly 2.2%.

Chief Executive Paolo Ardoino presented the quarter as a stress test survived. “Through all of the volatility, USD₮ remained fully backed with our reserves still exceeding liabilities by $4.11 billion,” he said in the release. Tether also cut secured lending by $2.38 billion, or 15%, without naming borrowers or the collateral involved.

The Audit Has Still Not Landed On the audit, Tether said in the quarterly release only that “the Big Four audit process continued.” The company engaged a Big Four firm in March for the first full audit of its reserves, and four months on the quarterly disclosure is still an attestation from BDO. The difference matters: an attestation confirms figures on a single date, while an audit examines how assets were valued and managed across the whole period. Circle, which issues USDC, already reports audited accounts.

USDT issuance grew just $446 million over the quarter, though Tether said its share of a shrinking stablecoin market climbed above 60%.

Related Listen: Stripe Bid $53B for PayPal: Who Actually Wins Stablecoin Payments?

AI-assisted content: This article was produced with the assistance of AI tools and was reviewed, edited, and fact-checked by a member of the Unchained editorial team before publication.

Tether Posts Strong Q2 Performance, Generates $1.5B Net Operating Profit, Maintains $4.11B Reserve Buffer, and Expands Gold Holdings to More Than 146 Tons

Tether International, S.A. de C.V., today published its attestation for Q2 of 2026, prepared by BDO, a top-five global independent accounting firm. The report confirms the accuracy of Tether’s Financial Figures and Reserves Report and provides an overview of the assets backing USD₮ as of June 30, 2026.

USD₮ issuance increased, with approximately $184.6 billion in tokens issued at the end of Q2, around $446 million higher than at the end of Q1 despite a decrease in the industry’s total market cap. USD₮’s resilience extended its market share to over 60% of the total stablecoin market. The results demonstrate the strength and resilience of Tether’s reserve strategy through significant volatility across gold and Bitcoin. 

Tether’s reserves continue to be centered on short-duration, high-quality liquid assets. Its net operating profit, led by U.S. Treasury and repo, reached approximately $1.50 billion for the quarter. The majority of reserves remain in U.S. government-backed instruments and short-term liquidity facilities, providing the liquidity needed to manage redemptions across different market conditions. As a result, the Company remained one of the world’s largest buyers and holders of U.S. Treasuries.

At the end of the quarter, Tether’s reserves exceeded its liabilities by approximately $4.11 billion, demonstrating the resilience of the Company’s reserve structure through sharp market volatility. Tether also reduced its secured lending exposure by approximately $2.38 billion (15%).

The Management of the Company asserts the following as of June 30, 2026:

The Company’s total assets amount to US$ 187,751,426,411 The Company’s total liabilities amount to US$ 183,641,897,215, of which US$ 183,622,105,630 relate to digital tokens issued The Company’s assets exceed its liabilities by US$4,109,529,196 “Q2 demonstrated the strength of Tether’s reserve strategy under real market pressure,” said Paolo Ardoino, CEO of Tether. “The assets that back some of Tether’s reserves were tested directly during the quarter. Through all of the volatility, USD₮ remained fully backed with our reserves still exceeding liabilities by $4.11 billion. Our net operating profit for the quarter was $1.50 billion, led by a strong U.S Treasury portfolio and repo performance. We remained one of the world’s largest buyers of U.S. Treasuries, reduced secured lending by $2.38 billion, and added 14 tons of physical gold. At the same time, our global user base continued to grow by more than 30 million users. These results show that Tether has the liquidity, discipline, and scale to remain resilient across market cycles while continuing to serve hundreds of millions of users around the world.”

USD₮ continues to serve as financial infrastructure for people and businesses across global markets. Tether remains focused on maintaining a liquid and diversified reserve structure capable of supporting that demand at scale. During the quarter, the Big Four audit process continued alongside the development of Tether’s broader technology and financial infrastructure ecosystem.

For more information, please refer to the latest Financial Figures and Reserves Report here

Visa Chief Executive Ryan McInerney said the payments company will remain neutral among stablecoins as Open USD prepares to enter a market led by Tether’s USDT and Circle’s USDC.

Summary

Visa says its stablecoin strategy will remain multi-coin and multi-chain rather than backing one winner. Open USD plans to launch later this year with more than 140 participating global companies. Visa’s stablecoin platform initially supports Open USD while retaining interoperability with existing settlement products worldwide. During Visa’s July 28 fiscal third-quarter earnings call, McInerney said the company would remain “multi-coin, multi-chain” and that its role was “not to pick winners.” Instead, Visa plans to help clients connect securely to whichever stablecoins, networks and infrastructure gain adoption.

Visa separates Open USD support from a single-token bet Visa is one of more than 140 companies supporting Open Standard, the independent consortium developing Open USD. Other participants include Mastercard, Stripe, Coinbase, BlackRock, BNY, Google and several global banks.

However, McInerney’s comments show that Visa does not view its involvement as an exclusive commitment to OUSD. The company already supports several stablecoins and blockchains through settlement, card and money-movement products. Visa previously described its technical approach as a “multi-coin and multi-chain foundation.”

ARK Invest researcher Lorenzo Valente interpreted the response as evidence that partner support may be “closer to a soft LOI than a strategic bet.” That is an analyst’s view, not a disclosed Visa contract term. Neither Visa nor Open Standard has published commitments showing how much capital, distribution or balance-sheet support each partner must provide.

On @Visa earnings call, the company was asked whether OpenUSD would compete with @circle , @tether, and the established stablecoin players.

Visa’s response:

“Visa, going forward, will remain multi-coin, multi-chain. Our role is not to pick winners. Our role is to help clients…

— Lorenzo Valente (@LorenzoARK) July 28, 2026 Open Standard plans to launch Open USD later in 2026. Its website says businesses will be able to mint and redeem OUSD without fees or volume limits, while most revenue from the reserves will return to participants that adopt and distribute the token.

That model differs from the issuer-led structures used by USDT and USDC, where the issuing company controls reserve management and related economics. Open Standard says an independent management team and partner-led governance will oversee OUSD. These are planned product features, and the token has not yet launched.

Notably, Open USD’s launch raised questions about Circle’s reserve-income model. Circle shares fell 17.5% on June 30, although Russell index removals also contributed to that day’s decline, making it difficult to isolate OUSD’s effect.

Visa is building infrastructure across stablecoins Visa’s practical commitment is clearer in its own product releases. On July 16, the company introduced the Visa Stablecoin Platform for banks, fintechs and crypto companies. The platform initially provides access to Open USD, including minting, burning, storage and transfers through a Visa-managed environment.

The company said the platform will also connect with its existing stablecoin settlement, linked-card and money-movement services. In June, Visa reported that its stablecoin settlement activity had reached an annualized run rate of about $7 billion as of March 2026.

Additionally, Visa’s stablecoin platform was described as a route for institutions to use Open USD without building every wallet, security and treasury function internally. Visa’s broader structure could also allow it to serve clients choosing USDC, USDT or another regulated token.

Open USD’s launch will test partner commitment Open Standard has not announced an exact launch date, initial circulating supply or confirmed transaction volume. Because OUSD is not yet live, there is no verified on-chain activity or market capitalization to compare with USDT and USDC.

The next test will be whether partners integrate OUSD into real payment, settlement and trading products after launch. Visa has already built an initial access route through its platform, but McInerney’s comments indicate the company will continue supporting competing tokens and networks.

Therefore, Open USD may gain distribution through Visa without becoming Visa’s exclusive stablecoin. Adoption will depend on reserve arrangements, regulatory compliance, partner integrations and actual customer demand rather than the size of the consortium alone.

Tether Signs MoU with the Nairobi Securities Exchange to Explore Digital Assets Use Cases, Tokenization, Blockchain Technology, and Digital Asset Education in Africa

28 July 2026 – Tether, the largest company in the digital asset industry, has signed a Memorandum of Understanding (MoU) with the Nairobi Securities Exchange (NSE) to explore digital asset education, tokenization, and financial market innovation in Nairobi.

The NSE, established in 1954, is one of the leading African exchanges, based in Kenya, that offers trading facilities to people seeking exposure to Kenya’s and Africa’s economic growth. With a market cap of approximately $26.4 billion, NSE plays a vital role in Kenya’s economic growth by encouraging savings and investment and helping local and international companies access cost-effective capital. NSE is a member of the Association of Futures Markets and is a partner exchange in the United Nations-led SSE initiative. The NSE provides a world-class platform for trading equities, debt securities, and derivatives for people in Nairobi and the diaspora.

Tether and NSE aim to close the gap between where Kenyan investors are today and where they need to be by proposing an investor education program through training sessions, workshops, and other accessible, structured knowledge-transfer initiatives on capital markets in the digital age, targeting participants from NSE-listed brokers and retail investor groups, to build awareness and participation in capital markets through digital assets.

This MoU also aims to support the development and implementation of a blockchain-based market infrastructure for the tokenization and instant settlement of securities within the NSE using Distributed Ledger Technology (DLT) and enable fractionalized access to securities for both local and diaspora investors via the Hadron platform. Tether and NSE will also design and pilot secured onboarding flows tailored to the Kenyan regulatory environment to streamline Anti-Money Laundering (AML) and Know Your Customer (KYC) processes.

Another key area of focus is the potential development of Real World Asset (RWA) Tokenization, which will explore the Hadron platform’s features and functionality to enable the issuance and trading of tokenized securities and other financial instruments. To promote financial freedom and optimize the institution’s financial workflow, Tether aims to support the integration of instant and atomic settlement mechanisms to reduce the institution’s current three-level settlement cycle. Additionally, both parties will assess the viability of integrating USD₮ as a potential digital settlement infrastructure layer to enhance liquidity and attract increased capital flow where permitted by.

“The use cases for digital assets are evolving, from crypto into real-life applications and, ultimately, cross-border institutional finance. This is what true freedom means. We’re glad to deepen our collaboration with the Nairobi Securities Exchange to advance practical institutional adoption and technological progress. Our goal is to streamline operations and enable efficient, transparent, accountable, and sustainable processes, while protecting data and privacy,” said Paolo Ardoino, CEO of Tether. 

“This MoU is fully aligned with the NSE’s 2025–2029 Strategic Plan, which is anchored on leveraging technology, deepening market participation, and expanding access to investment opportunities for all investors. By collaborating with Tether, we are exploring innovative technologies that have the potential to modernize market infrastructure, enhance operational efficiency, and broaden investor access while maintaining the highest standards of market integrity and regulatory compliance. As we execute our strategy, partnerships such as this will play a critical role in positioning the NSE as a globally competitive exchange and a catalyst for Kenya’s economic growth,” said Frank Mwiti, Chief Executive Officer, NSE.

Tether’s XAUT gold-backed token has been certified as Shariah compliant by Amanah Advisors, marking a step toward connecting tokenized real-world assets with Islamic finance markets, according to a Monday statement.

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The certification recognizes that XAUT is backed by physical gold ownership and avoids structures prohibited under Islamic finance, including riba, leverage and speculative derivatives.

“Gold has always represented stability and trust across cultures and generations,” Tether CEO Paolo Ardoino stated. “With XAUT now recognized as Shariah compliant, we are expanding access to digital gold in a way that respects Islamic finance principles while leveraging the transparency and efficiency of blockchain technology.”

Tether said the certification could help expand access to digital gold across regions with growing Islamic finance activity, including GCC countries, South Asia and parts of Africa. Amanah Advisors will continue supporting governance frameworks for wider Shariah-compliant adoption of XAUT.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.

The world’s largest stablecoin issuer pays roughly $2.9 billion a year in fees to blockchains it does not control. Its answer was to back two competing chains at once: Plasma, the $373 million DeFi-flavored bet, and Stable, the enterprise rail where USDT is the gas. One issuer, two armies, one enemy named Tron, and a strategy that makes sense only when you see whose problem it solves.

Summary

Tether’s ecosystem has seeded two purpose-built USDT chains that compete directly with each other: Plasma, live since September with a $373 million token sale, a paymaster model, and roughly $551 million in DeFi TVL, and Stable, live since December with $2 billion in pre-deposits, USDT-as-gas, and an enterprise focus. The motive is a number: analyses put Tether’s annual network-fee bill near $2.9 billion, split largely between Ethereum and Tron, value that leaks to base layers the issuer does not control while its own revenue runs near $5 billion. The two chains embody opposite design philosophies, a subsidized general-purpose DeFi economy with a native token doing traditional work, versus a stripped payments rail where the dollar itself is the fuel, and opposite go-to-market strategies. The real target is not each other but Tron, which still carries roughly 45% of all USDT and earns the fees on the world’s largest remittance flows, a moat neither challenger has meaningfully dented. Funding both sides is not indecision; it is a portfolio: the issuer wins if either chain repatriates the fee leak, wins bigger if both segment the market, and loses only to the status quo it is paying $2.9 billion a year to escape. Companies do not usually finance both armies in a war, but then no company has ever been positioned quite like Tether. The issuer of USDT sits atop the most profitable simple business in finance, collecting Treasury yield on the reserves behind roughly $150 billion of circulating dollars, and it watches, every day, a substantial slice of its ecosystem’s economics leak sideways: the fees users pay to move USDT accrue not to Tether but to the blockchains USDT lives on, a bill that research houses have tallied near $2.9 billion a year, flowing mostly to Ethereum validators and, above all, to Tron, the chain that quietly became the developing world’s dollar-remittance backbone.

Tether’s response, characteristically, was not one bet but two. Plasma, backed by Tether-adjacent capital and Founders Fund, raised $373 million in an oversubscribed sale and launched in September as a general-purpose stablecoin chain with a native token, a paymaster that makes USDT transfers free, and a DeFi ecosystem that onboarded Aave, Ethena, and Euler on day one. Stable, backed by Bitfinex with Tether’s chief executive advising, drew $2 billion in pre-deposits and launched in December as something sparer: a chain where USDT itself is the gas, transfers are free by protocol rule, and the pitch is enterprise blockspace rather than yield farming.

Bitfinex-backed layer 1 Stable releases tokenomics, mainnet to go live on Dec. 8

Stable shares tokenomics details ahead of its Dec. 8 mainnet launch, with a total supply of 100B tokens distributed among ecosystem, team, investors and advisors.

— crypto.news (@cryptodotnews) December 3, 2025 Two chains, one family, the same target market, and a rivalry the ecosystem politely declines to name. This piece names it, maps the two designs honestly, and answers the question the arrangement raises: why an issuer would fund its own chain war, and what winning even means when you own both sides.

The fee leak: the war’s actual cause Start with the number that explains everything, because without it the two-chain strategy looks like a waste and with it the strategy looks obvious.

USDT’s success created a strange corporate geometry: the asset is Tether’s, the activity is enormous, and the toll booths belong to other people. Every USDT transfer on Ethereum pays gas to Ethereum validators; every transfer on Tron, where nearly half of all USDT lives and where the remittance corridors of Asia, Africa, and Latin America actually run, pays energy and bandwidth costs into Tron’s economy.

Aggregated, analyses of Tether’s ecosystem have put the annual network-fee spend associated with USDT movement at roughly $2.9 billion, against issuer revenues that industry estimates placed near $4.9 billion in the same period, meaning the base layers underneath USDT capture value at a scale approaching the issuer’s own take.

Delphi Digital’s framing of the problem is the cleanest: as issuance spread across chains, the infrastructure supporting USDT ended up largely outside Tether’s control, and the economic value generated by usage is disproportionately captured by the rails, especially Ethereum and Tron.

For most companies this would be an irritation. For a stablecoin issuer, it is a strategic vulnerability with three faces. Economically, it is margin leaking to landlords. Competitively, it funds a chain, Tron, whose operator is an independent actor with his own token, his own politics, and his own regulatory exposures, none of which Tether chooses. And architecturally, it means the user experience of the world’s most used digital dollar, fees, congestion, gas-token requirements, is set by networks optimizing for other things.

The purpose-built USDT chain is the answer to all three at once: repatriate the fees, own the rail, and design the experience around the dollar. The only question was which design, and Tether’s ecosystem answered: both.

Two chains, two philosophies The rivals are best understood as opposite answers to one question: how much chain does a stablecoin need?

Plasma’s answer is: a whole one. It is a full EVM Layer 1 with its own token, XPL, doing the traditional native-token jobs, validator staking, settlement asset, and value accrual through the chain’s growth, while a paymaster contract absorbs gas costs so that simple USDT transfers cost users nothing. The design keeps the familiar crypto economy intact: XPL had a $373 million public sale seven times oversubscribed, the chain launched with more than a hundred DeFi integrations, TVL has built to roughly $551 million, sub-second PlasmaBFT finality serves trading as well as payments, Bitcoin anchoring adds a security narrative, and a confidential-transfers module courts payroll and B2B flows.

https://x.com/cryptodotnews/status/1971621952008999090

Plasma is, in short, a general-purpose chain that subsidizes its stablecoin lane, betting that free USDT transfers pull in users whose other activity, lending, trading, yield, pays the bills and accrues to the token. The paymaster’s economics depend on exactly the patron logic this publication’s gasless-transfers guide dissects: most zero-fee chains in history died when the subsidy ran out, and Plasma’s differentiating claim is that its subsidy is underwritten by an ecosystem with a direct commercial interest in USDT ubiquity.

Stable’s answer is: as little chain as possible. No paymaster indirection, no separate gas asset at all: USDT0, the omnichain dollar, is the fee token; simple transfers are exempt by protocol rule, and the native STABLE token is confined to staking and governance, deliberately invisible to users, the architecture this publication’s companion guides map in detail.

Where Plasma courted DeFi, Stable ships enterprise blockspace, dedicated capacity for institutional payment flows, and its traction metric was not TVL but the $2 billion in pre-deposits that arrived before mainnet. The design concedes the DeFi economy to others and optimizes one thing: dollar movement at payments-grade predictability, on the bet that remittance processors, merchants, and treasuries choose rails the way they choose clearing banks: for boredom, not composability.

The philosophies produce different vulnerabilities, and honesty requires both. Plasma’s risk is dilution of purpose: a general-purpose chain competing for DeFi against Ethereum, Solana, and every L2, where free USDT transfers are a loss leader for an economy that may never outgrow its subsidy, and where the XPL token must justify itself against exactly the value-accrual skepticism this publication applies everywhere.

Stable’s risk is the mirror: a rail so minimal that its moat is only execution and alignment, with no ecosystem gravity to retain users who arrive, and a token whose value case, as our STABLE guide argues, waits on governance decisions nobody has made. One chain risks being too much; the other risks being too little; and both share the risk that actually matters, which lives in Asia, on the incumbent.

Tron: the enemy both were built to fight The polite framing says Plasma and Stable address different segments. The impolite truth is that both exist to take the same prize: the roughly 45% of all USDT that lives on Tron and the fee flows it generates.

Tron’s dominance is the most underexamined fact in stablecoin land. It hosts the largest share of the largest stablecoin, it carries the remittance and exchange-settlement flows of the markets where USDT is not a trading chip but a savings technology, and its moat is precisely the kind that whitepapers cannot breach: cash-network effects, integrations in thousands of local exchanges and OTC desks, muscle memory in a hundred million wallets, and fees that, while meaningfully nonzero, are known, tolerated, and priced into every corridor.

Both challengers aim at it explicitly, Plasma’s remittance-routing pitch is skip Tron’s TRX gas requirement, Stable’s free-transfer pitch is the same sentence with different plumbing, and both discovered what challengers of payment incumbents always discover: users do not migrate for architecture, they migrate when their exchange, their employer, or their remittance app migrates, which makes the war a business-development grind, not a technology contest.

The scoreboard that matters is therefore not TVL or transaction counts, both inflatable, but the share of USDT supply resident on each chain, and by that measure the war has barely begun: Tron’s share has eroded only at the edges, the challengers’ combined float remains a fraction of it, and the incumbent retains the advantage every toll-road owner has, profitability that funds its own retention incentives.

Which is exactly why the two-chain strategy makes sense from the issuer’s chair, and this is the piece’s resolving move. Tether does not need to pick the winning design; it needs the fee leak plugged and the rail owned by family, and funding two philosophies is how a portfolio manager attacks an uncertain market: Plasma tests whether a subsidized DeFi economy can bootstrap payments gravity, Stable tests whether enterprise minimalism can, the two chains’ competition sharpens both faster than monopoly would, and every dollar of USDT float either one wins from Tron or Ethereum converts leaked fees into family economics.

If both succeed, the market segments, retail-and-DeFi on one, institutional on the other, and the issuer owns the whole stack. If one dies, the survivor inherits its lessons and its float. The only losing scenario is the status quo, and the status quo is the thing costing $2.9 billion a year.

Wars are usually negative-sum for the combatants and profitable for the arms dealer; this one was designed by the arms dealer, which is the fact to keep in view as the ecosystem spends the next year pretending the two chains are not aimed at each other, and at Tron, and, quietly, at the $2.9 billion.

The regulatory shadow both chains share One more force shapes the war from outside it, and the family’s own coverage of Washington makes it unavoidable: both chains are Tether-ecosystem infrastructure launching into the exact regulatory window in which American law is deciding what offshore-issued dollars may do.

The GENIUS Act’s stablecoin framework, whose missed implementation deadlines this publication has chronicled, and the CLARITY Act’s market-structure fight, live on the Senate floor this very week, together draw the perimeter that will define both chains’ addressable markets. The core exposure is identical for both: USDT remains an offshore-issued dollar under frameworks built to privilege domestically regulated issuance, and every corridor the chains win converts informal USDT usage into visible, systematic flows that regulators can see, name, and gate.

The chains’ opposite strategies produce opposite versions of the exposure. Stable’s enterprise pitch runs toward the regulated world on purpose, courting institutions whose compliance departments must bless the rail, which makes it the family’s test of whether Tether-aligned infrastructure can pass American diligence at all. Plasma’s retail-and-DeFi economy runs away from that scrutiny by construction, thriving in exactly the permissionless corridors that the illicit-finance provisions of every pending bill target.

One chain bets the family can join the regulated system; the other bets it can outgrow the need to; and the legislation moving through Congress this month will grade both bets before either chain’s technology does. The honest summary for the cluster this piece opens: the fee-leak war is the family’s offensive campaign, and the regulatory perimeter is its defensive one, and the second war, unlike the first, is not one the issuer designed.

The third bidder nobody prices One actor complicates the family war’s tidy geometry, and the honest map includes it: the incumbent chains are not standing still, and the war’s most likely spoiler is not either challenger failing but the leak becoming cheaper to tolerate.

Tron’s defense is already visible in its pricing behavior: the network has periodically tuned its resource model when migration pressure rises, and its operator retains the toll-road owner’s ultimate weapon, the ability to cut fees toward zero in the corridors under attack while keeping them positive everywhere else, a price-discrimination play incumbents from airlines to telecoms have run against cherry-picking entrants forever. Every basis point Tron shaves narrows the challengers’ pitch, and Tron can shave from profits while the challengers subsidize from war chests, an asymmetry that favors the incumbent in any prolonged price war.

Ethereum’s defense is structural: the institutional and DeFi USDT that lives there is the stickiest float in the ecosystem, held for composability with the deepest markets in crypto, and no payments-optimized rail competes for it at all, which is why the realistic battlefield is Tron’s remittance float, not Ethereum’s collateral float, and why the challengers’ addressable prize is meaningfully smaller than the headline $2.9 billion suggests.

And there is a fourth trajectory the war could take, the one the arms-dealer framing predicts: the leak becoming the product. Tether’s ecosystem does not strictly need either chain to win the migration war if the chains’ existence disciplines the incumbents’ pricing, converts the issuer from rate-taker to rate-negotiator, and hands the family credible exit infrastructure it can invoke in every commercial conversation with Tron.

Leverage, not conquest, may be the strategy’s real deliverable: the $373 million and the $2 billion pre-deposits purchase, at minimum, the ability to move, and the ability to move is what turns a captive tenant into a negotiating one. On this reading, the two chains are already succeeding, quietly, in the only meeting that matters, and the float-share scoreboard understates a war whose first victory is a better lease.

What to watch USDT float by chain, quarterly: The war’s only honest scoreboard: the share of total USDT supply resident on Plasma and Stable versus Tron and Ethereum. Transaction counts inflate; resident float is the fee leak actually moving. Watch whether the challengers’ combined share reaches double digits, and whose share it comes from.

The subsidy postures: Plasma’s paymaster spend against its DeFi economy’s fee generation, and Stable’s emission schedule against its enterprise fee flows: both chains’ free tiers have funding models this publication’s framework can grade, and the first one to show cross-subsidy covering the free lane has found the sustainable shape.

A corridor flip: The event that would actually move the war: a major remittance processor, exchange, or payments app moving a named corridor’s settlement from Tron to either challenger. One real corridor outweighs any TVL milestone, and business-development announcements of that specific shape are the tell.

The issuer’s hand: Canonical USDT issuance decisions, where Tether mints natively versus where USDT0 bridges, are the issuer quietly picking favorites, and any consolidation move, shared infrastructure, a merger, a formal designation of lanes, would be the portfolio manager closing a position. The war ends the way it started: by family decision.

A closing note on the observable that will settle the philosophies faster than any strategy memo: developer behavior. Chains are chosen twice, once by users moving money and once by builders deploying products, and the two chains’ opposite designs make opposite bids for the second constituency. Plasma’s full EVM economy with a hundred day-one DeFi integrations bids for builders with composability and a token to align them; Stable’s enterprise blockspace bids with predictability and a customer base of institutions that pay for boredom.

The early returns are legible in the metrics each side brags about: TVL and integrations on one side, pre-deposits and enterprise partnerships on the other, and the metric each side avoids, and the first year of divergence will show whether payments infrastructure in crypto follows the platform playbook, where ecosystems win, or the utility playbook, where reliability does.

Tron, for what it is worth, won its position with neither: it won with distribution into exchanges and remittance desks before anyone was watching, which is the quiet reminder that the war’s decisive constituency may be neither users nor builders but the few hundred business-development conversations, with processors, exchanges, and payroll providers, that actually move float at scale. Both challengers know it, which is why the war’s real battles will be invisible, fought in integration roadmaps and settlement agreements, and reported, if at all, one corridor at a time.

Frequently Asked Questions What are Plasma and Stable, in one line each? Plasma is a general-purpose stablecoin Layer 1, live since September, with a native token (XPL), a paymaster making simple USDT transfers free, and a DeFi ecosystem around $551 million in TVL. Stable is a payments-focused Layer 1, live since December, where USDT0 itself is the gas asset, simple transfers are free by protocol rule, and the focus is enterprise and institutional flows.

Why does Tether’s ecosystem back both? Because the strategic problem, roughly $2.9 billion a year in USDT-related network fees leaking to chains outside the family, above all Tron and Ethereum, matters more than which design solves it. Backing two opposite philosophies is portfolio logic: each tests a different route to repatriating the fee flow, competition sharpens both, and any float either wins converts leaked economics into aligned economics.

How do the two chains differ technically? Plasma keeps a conventional chain economy: XPL handles staking and settlement, a paymaster subsidizes the free USDT lane, the EVM ecosystem is fully general, and Bitcoin anchoring plus confidential transfers extend the feature set. Stable removes the separate gas asset entirely, USDT0 pays fees, simple transfers are exempt, the STABLE token is confined to staking and governance, and capacity is marketed as enterprise blockspace.

Are they really competitors, or complementary? Directly competitive, whatever the diplomatic framing. Both target the existing USDT float and the same migration sources, Tron’s remittance corridors first, and both pitch the identical headline benefit of free dollar transfers. Segmentation into retail-DeFi versus institutional lanes is a possible equilibrium, but it would be an outcome of the competition, not an alternative to it.

Why is Tron the real target? Tron carries roughly 45% of all USDT, the largest share of the largest stablecoin, concentrated in the remittance and exchange-settlement corridors where USDT functions as everyday money. Its fees are the biggest single component of the ecosystem’s leak, and its moat, integrations, habits, and cash-network effects, is the one both challengers were engineered to attack, so far with only marginal erosion.

What would winning look like for either chain? Resident USDT float, not activity metrics. A challenger reaching a double-digit share of total USDT supply, or flipping a named remittance corridor’s settlement from Tron, would mark real progress. For the issuer’s ecosystem, winning is broader: any combination of outcomes that moves fee flows from external chains to family-aligned ones, including a split decision where both chains hold different segments.

What are the main risks to each? Plasma: the general-purpose trap, competing for DeFi against far larger ecosystems while its free lane depends on subsidy, and an XPL token facing the standard value-accrual skepticism. Stable: the minimalism trap, a rail with no ecosystem gravity, a token whose value case awaits governance decisions, and reliance on enterprise adoption cycles that move slowly. Both: Tron’s incumbency and the possibility that users simply do not migrate.

What does this mean for USDT holders? Little direct risk and some structural benefit: the chains compete to make USDT cheaper and easier to move, and the omnichain plumbing (USDT0) connecting them is the same system this publication’s guides describe, with the same trust stack. The war’s outcome matters more for XPL and STABLE holders, whose tokens are claims on the respective designs winning, and for the fee economics of Tron and Ethereum, the incumbents being challenged. This is educational analysis, not investment advice.

Disclaimer: This article is for information and educational purposes only and does not constitute financial or investment advice. Figures for fees, revenues, TVL, and supply shares are estimates drawn from third-party research and change continuously. Nothing here is a recommendation to buy, sell, or hold any asset. Always do your own research. Information is accurate as of July 24, 2026.

July 22, 2026 at 5:00 PM EDT

Updated on

July 22, 2026 at 6:27 PM EDT

It was billed as cryptocurrency’s big moment, President Donald Trump’s first legislative victory in his drive to make the US the “crypto capital of the world.”

Surrounded by lawmakers and industry executives in the East Room of the White House, Trump signed the Genius Act into law a year ago this month, celebrating it as a step toward bringing digital assets into the mainstream of American finance.

By providing the first set of federal rules for a type of crypto known as stablecoins, the legislation aimed to inspire public confidence in a $300 billion marketplace. It promised protections against fraud by forcing companies to open their books. And it gave Congress a chance to follow through on attempts to address one of crypto’s most longstanding concerns — the persistent use of stablecoins among criminals, terrorists and sanctions evaders — by bringing companies under the watch of US regulators, whether they’re based in the US or not.

But in interviews and a court filing, an inside account of the negotiations surrounding the law has emerged: In the months before and after Trump took office, his advisers Howard Lutnick and Bo Hines worked behind the scenes to loosen those safeguards and shape the law in ways that benefited the world’s dominant stablecoin issuer, Tether. Among Trump’s advisers, Lutnick and Hines played the most formative roles in a legislative process that ultimately included measures favorable to Tether, according to people familiar with the discussions. The people, like dozens of others who provided details of negotiations surrounding the Genius Act for this story — crypto industry executives, lobbyists and current and former US government officials — requested anonymity because they weren’t authorized to discuss the talks.

US President Donald Trump signed the Genius Act in the White House on July 18, 2025. He hailed the bill as a “giant step to cement American dominance of global finance and crypto technology.” Photographer: Al Drago/BloombergBefore Lutnick became Trump’s commerce secretary, he was chairman and chief executive officer of the Wall Street investment bank Cantor Fitzgerald, which manages Tether’s assets. From that position, he acted as a crisis manager throughout 2024, countering bad publicity about Tether and seeking to influence lawmakers on legislation the company opposed, according to congressional lobbying records, allegations contained in a federal court filing and one person who was briefed on those efforts.

After Trump took office, Hines was the closer. The then-29-year-old White House aide, a North Carolina entrepreneur and crypto investor who ran unsuccessful congressional campaigns as a Republican in 2022 and 2024, became the administration’s self-described “bully” on the bill. As negotiations neared the finish line, Hines said that a provision Tether wanted was a “red line” for the White House, according to three other people familiar with the matter.

This account of how the legislation took shape shows the previously unreported steps that first Lutnick, then Hines took that benefited Tether, which controls about 60% of the global stablecoin market. And it sheds new light on the ways that the administration’s policymaking has aligned with its appointees’ financial interests. Both Hines and Lutnick have received significant benefits from the company.

Over an 18-month period that began in 2024 and ended shortly after the passage of the Genius Act, Tether executives:

Sold the rights to a multibillion-dollar stake in their company to Lutnick’s financial services firm in April 2024 for $600 million, a price that Tether’s chairman described to a business associate as “bloody cheap.”

Invested $775 million in December 2024 in Rumble Inc., a money-losing technology company that has a partnership agreement with the unprofitable firm that runs Trump’s Truth Social platform and counts several Trump associates as investors.

Hired Hines for an executive position in August 2025, roughly one month after the bill was signed.

Made a loan to a trust benefiting Lutnick’s children as they were purchasing their father’s multibillion-dollar business interests in October 2025.

As part of a federal ethics agreement required of cabinet appointees, Lutnick had pledged to sell his stake in Cantor Fitzgerald and to recuse himself from matters that might present a conflict of interest. A spokesperson for the Commerce Department did not answer detailed questions for this story but said Lutnick complied with the terms of that agreement; divested from his holdings, including Tether; and “was not involved in any matters relating to the Genius Act’s stablecoin provisions.”

Hines didn’t respond to detailed requests for comment. Neither did the White House.

Tether said in a statement that the company “strongly rejects any suggestion that its engagement with policymakers regarding stablecoin legislation was improper” and that it regularly interacts with regulators, legislators and law enforcement officials “lawfully, transparently, and alongside a broad range of market participants.” The company also said the Genius Act provides no “special advantages to Tether,” arguing that the new US regulatory plans will “apply across the industry to any issuer seeking to operate under the framework.”

The bill drew intense lobbying from all corners of finance, including crypto exchanges, credit card companies and community banks. But Tether is by far the industry’s dominant issuer — its biggest competitor is half its size — and it had the most at stake during the 2025 discussions.

Since the law was signed, Tether, which operates from El Salvador, has continued to grow. It launched a new US token to reach American consumers and comply with the rules. Yet its core product remains the world’s most widely used stablecoin — and a go-to currency for terrorists, North Korean hackers and sanctioned entities in both Iran and Russia, according to reports compiled by industry researchers and government officials. Under the Genius Act’s provisions, that coin, known as USDT, may never be subject to regulation by US authorities.

The Genius Act’s final form contained provisions that benefited Tether and differed from federal lawmakers’ previous attempts to regulate stablecoins, which offer users convenience and pseudo-anonymity — meaning their actual identities are hidden even though their alphanumeric wallet addresses remain permanently public on the blockchain.

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In 2023 and 2024, members of Congress proposed bipartisan legislation that aimed to push foreign companies such as Tether to submit to US regulatory scrutiny — including anti-money-laundering rules — if they wanted to sell stablecoins in the US.

The Genius Act relaxed that requirement. A provision that critics call the “reciprocity loophole” would allow Tether’s USDT to be regulated by El Salvador, where the company is building a new headquarters, if the US Treasury secretary determines the Salvadoran regulatory scheme is comparable to the US approach. Rules governing such determinations are still being drafted.

Another change limited stablecoin issuers’ responsibility for ensuring that their tokens aren’t misused by criminals, terrorists or sanctions evaders. That language, known as the “defi loophole,” means that companies like Tether aren’t responsible for tracking their products on secondary markets known as decentralized finance, or “defi,” platforms. Unlike those who buy tokens through banks or exchanges, such users can trade directly on the blockchain without identifying who they are or how they intend to use the funds.

The legislation also created a three-year grace period for selling stablecoins in the US before their issuers have to comply with its terms. As lawmakers negotiated the bill’s final details, some Democrats proposed a tighter time frame, 18 months, but Tether wanted three years, according to people familiar with its position. At that point, Hines stepped in.

In negotiations, he told people that Tether was important to the White House and Republicans should stand firm. Keeping the three-year grace period was a “red line,” Hines said, according to three people familiar with his conversations.

Bo Hines, whom Trump named executive director of the Presidential Council of Advisers for Digital Assets, took a leadership role in pushing the Genius Act through Congress. Photographer: Tierney L. Cross/BloombergSome financial experts warn that these provisions may undermine US attempts to fight money laundering by criminals and sanctioned entities while complicating Trump’s stated goal of making the US the world’s leader in digital currencies.

Timothy Massad, a former assistant secretary at the US Treasury Department during President Barack Obama’s administration, said the failure to close these so-called loopholes might put US crypto companies at a competitive disadvantage by allowing foreign issuers to sidestep costly anti-money-laundering regulations. It could also weaken the dollar, he said.

“If we want the dollar to remain the strong reserve currency of the world, we shouldn’t enable terrorists and sanctioned individuals and criminals to move dollars anonymously,” said Massad, who also served as chairman of the Commodity Futures Trading Commission from 2014 to 2017.

Every form of currency is vulnerable to misuse for illicit transactions. But since it introduced USDT in 2014, Tether has faced regular questions about the scrutiny it brings to its customers. In response, the company had argued that its location overseas meant it could resist what it described as US regulatory overreach. But that position evolved over time, and in December 2023, Tether announced a policy of voluntarily freezing wallets of any people or entities sanctioned by the US Treasury.

Investigators continued to find evidence that USDT was being used for such activities as the fentanyl trade in Mexico and Russian sanctions evasion. A January 2024 UN report called USDT “a preferred choice” for crypto money launderers in Southeast Asia. That year, President Joe Biden’s National Security Council debated whether to ban Tether from selling its token in the US, according to two people familiar with the talks, who asked not to be named to discuss a sensitive matter.

Ultimately, that proposal was disregarded after law enforcement officials argued that they could track illicit finance through USDT transactions. Over time, federal law enforcement officials have praised Tether for becoming more helpful in freezing tokens used by bad actors.

“The company has built one of the most effective law enforcement cooperation programs in global finance,” Tether’s spokesman said in response to questions. The company said it’s committed to deterring financial crime, and the Genius Act will strengthen such efforts.

Even so, throughout the debates over the Genius Act — and since then — USDT has remained a frequent choice for illicit users.

Throughout 2025, the sanctioned Central Bank of Iran purchased $507 million of Tether’s USDT, according to Elliptic, a blockchain analytics firm widely used by leading digital assets companies and traditional banks. That July, the same month Trump signed the act, Elliptic found that almost $2.5 billion worth of Tether’s USDT was received by wallets linked to Russian companies that, according to the Treasury Department, provide “cross-border settlement platforms for sanctions evasion.”

This year alone, more than $4 billion worth of the token was used in illicit marketplaces favored by Chinese scam networks — which perpetrate crimes including crypto cons known as pig butchering, impersonation frauds and sextortion — according to data by Elliptic.

And in the US, federal prosecutors across the country have filed scores of claims since July 2025 seeking to seize at least $172 million worth of USDT that they said was used unlawfully, according to court records.

Tether has more than twice as many tokens in circulation as its biggest competitor, Circle Internet Group Inc., but has fewer than half as many employees and uses contractors to conduct some of its analysis of suspicious transactions. Tether declined to answer specific questions about the size of its compliance department. But the company said it “works directly and regularly with over 340 law enforcement agencies across 67 jurisdictions to identify, freeze, and help recover assets linked to illicit activity.”

“This is not theoretical compliance but measurable, operational cooperation that no financial institution, including many traditional banks, can match,” said the company spokesman.

Lutnick’s CampaignsWhen Lutnick’s firm, Cantor Fitzgerald, began managing Tether’s reserves in 2021, the investment banker had already known Trump for decades. By that time, Trump was a one-term president, seeking a return to the White House. Tether was a hugely profitable company with an image problem. In 2024, Lutnick campaigned hard for them both.

Despite the importance of assuring buyers that its tokens are backed by safe assets, Tether has never published an independent audit detailing its reserves. In 2021, the company and a related exchange paid $61 million to settle claims brought by federal regulators and New York State (where it is banned from operating) that Tether misled investors about its reserves. Tether acknowledged no wrongdoing in the settlements. As written, the Genius Act will require stablecoin issuers to publish annual audits. Tether announced this year that it had hired an auditor, though it hasn’t disclosed any plans for releasing an audit.

Howard Lutnick, who was chairman and chief executive officer of Cantor Fitzgerald at the time, at the opening day of the World Economic Forum in Davos, Switzerland, in January 2024. Source: BloombergAmid questions about Tether’s reserves, Lutnick came to the company’s public defense. In January 2024, he traveled to the World Economic Forum in Davos, Switzerland, and declared on Bloomberg TV: “They have the money they say they have.”

The following month, Lutnick traveled to El Salvador, where he met with Tether’s chairman, Giancarlo Devasini, and the country’s crypto-friendly President Nayib Bukele, the self-styled “world’s coolest dictator.” Last year, Tether announced plans to relocate its headquarters to the country’s capital, San Salvador.

And in April 2024, Cantor Fitzgerald acquired the right to a 5% stake in Tether through a $600 million convertible bond — a transaction that wasn’t publicly reported until November, after Trump won the presidency. The price was a remarkable discount, based on Tether’s own accounting: In 2024, it reported profit of about $13 billion, which suggests the company was worth at least $130 billion, according to a benchmark of publicly listed financial firms. At that level, Cantor’s $600 million stake was worth more than $6 billion on paper.

Devasini called the price Cantor paid “bloody cheap,” according to Cory Klippsten, a Bitcoin entrepreneur who met with Tether executives and Lutnick in 2024.

Klippsten was involved in a business partnership with Tether that ultimately broke down, and the sides wound up in litigation. In court filings, Klippsten has accused Tether executives of poaching his employees, code and other trade secrets and reneging on a deal; Tether has accused Klippsten of improperly using Tether’s investment as collateral in a separate transaction. As part of the litigation, Klippsten is seeking to depose Lutnick and review documents about Cantor Fitzgerald’s relationship with Tether. An attorney for Lutnick said in court that the commerce secretary had no role in the dispute and that the request is meant to “harass and embarrass” Lutnick.

In a March court filing, Klippsten said he had taken contemporaneous notes detailing his conversations with Devasini. He recounted some of those notes in filings — including the “bloody cheap” remark. The filing describes Cantor’s convertible bond as “implicit compensation for acting as Tether’s advocate in Washington and the media.”

Stalled LegislationMembers of Congress had developed their own concerns. In late 2023, Republican Senator Cynthia Lummis of Wyoming co-signed a letter urging the Justice Department to determine whether Tether was “providing material support and resources” to terrorism organizations, including Hamas, during the deadly attacks that October in Israel. In April 2024, Lummis and Democratic Senator Kirsten Gillibrand of New York introduced a bill that could have required any stablecoin issuer doing business in the US to submit to US anti-money-laundering restrictions and disclosure requirements.

At the time, Lummis made clear that to enter the US market, Tether would have to comply with US rules. “So Tether, if it chooses to remain offshore, if it’s happier with a different regulator, that’s a business choice for them,” she told CoinDesk shortly after announcing the new legislation. “But if they want the US Good Housekeeping seal of approval on their product, and we hope they will, that they’ll come into compliance in the US.”

That July, Lutnick took another opportunity to defend Tether at the 2024 Bitcoin conference in Nashville, where Trump gave the keynote address. “We would never, ever be associated with a company that has anything to do with jihad,” Lutnick said, his voice rising in anger as he reminded the audience that more than 650 Cantor employees, including his brother, had died in the Sept. 11, 2001, terror attack on the World Trade Center. “And it disgusts me.”

Trump speaks at the Bitcoin 2024 conference in Nashville, in July 2024. Photographer: Brett Carlsen/BloombergAfter that speech, Trump — who had pivoted from crypto skeptic to crypto supporter in 2024 as he and his family members prepared to invest in the industry — invited Lutnick to join him on his campaign plane and asked him to be co-chairman of his transition committee. They flew to Minnesota, where Lutnick warmed up the crowd on stage before then-Senator JD Vance of Ohio, another vocal crypto advocate, spoke.

Trump’s surging candidacy buoyed the mood among Tether executives, according to Klippsten. “They have HOPE right now,” his notes say. “They could fly to NYC. Go on CNBC. That’s what Trump is offering them.”

Lutnick traveled in 2024 to Washington, where Cantor Fitzgerald’s lobbyists were engaging with members of Congress on stablecoin bills circulating in the House and Senate. He had a meeting with North Carolina Representative Patrick McHenry, then-chairman of the House Financial Services Committee, to discuss how a new law would affect a foreign company like Tether, according to a person familiar with the talks. McHenry didn’t respond to requests for comment. Lutnick also met with Lummis in September, although a spokesperson for the senator said the discussion focused on a potential Trump transition team and only briefly touched on her concerns about Tether and financial crimes.

The spokesperson said that Lummis “was never urged to back off of her support” for her bill, “nor was she pressured in any manner by Secretary Lutnick or those around him to make changes.”

One of Klippsten’s notes, recounted in a court filing, says that Devasini, Tether’s chairman, told him: “According to Howard, he managed to kill every bill about stablecoins, crypto, etc. There’s still some days before Congress comes to a halt. Howard says don’t expect anything upsetting.”

The bills went nowhere. The next year, both Lummis and Gillibrand voted for the Genius Act, including its provision allowing for “reciprocal” regulation by foreign countries. A spokesman for Gillibrand declined to comment on her vote. A spokesperson for Lummis said it’s not unusual for senators to “vote for something that doesn’t perfectly reflect their preferred way of regulating.” This year, Lummis is leading Senate discussions on a bill that would establish a regulatory framework for the rest of the crypto industry, beyond stablecoins.

After Trump’s November 2024 victory, Cantor helped arrange a new investment for Tether that put the stablecoin issuer more firmly into Trump’s business orbit. Around Christmas, the company invested $775 million in Rumble, the conservative video streaming company that hosts Trump’s Truth Social media platform and provides it with cloud infrastructure and advertising services.

The investment came at an unusual time; Rumble had run up $338 million in losses that year. The company, which bills itself as a “freedom-first” alternative to livestreaming and video content, counted several Trump allies who eventually joined his second administration among its investors: Vice President Vance; former FBI Deputy Director Dan Bongino; and former White House special adviser for AI and crypto David Sacks.

Tether’s investment set off a temporary spike in Rumble’s share price, and it closed on Dec. 26 at $16.27, a 126% gain since the day of the announcement. Rumble, which has rebranded itself as RUM Group Inc., devoted almost 68% of Tether’s investment, $525 million, to share buybacks from “certain members of key management.” Since then, Tether has gradually increased its equity stake in Rumble; it now amounts to roughly $875 million.

“Tether’s investment in Rumble reflects our shared values of decentralization, transparency and fundamental right to free expression,” Tether’s chief executive officer, Paolo Ardoino, said at the time. The company said roughly $250 million of its infusion would go for “growth initiatives,” including a crypto payments platform.

As Trump’s second administration took shape, the White House handed responsibility for shepherding stablecoin legislation to a former college football player whose introduction to cryptocurrency came when he played in the 2014 Bitcoin St. Petersburg Bowl.

‘Hi, Bo!’As a Washington newcomer, Bo Hines didn’t have a resume to match the crypto industry leaders and congressional staffers he met with regularly. But at 6-foot-1 and 205 pounds, he had other attributes welcome in Trump’s White House: a camera-ready jaw line, a staunch belief in the MAGA agenda and a documented refusal to accept the results of the 2020 presidential election. Also, during the fall of 2024, a business he operated with his father donated $1 million in billboard advertising to a political action committee supporting Trump’s campaign.

As the president’s choice to head the new administration’s council on digital assets, Hines worked on a range of issues, from establishing a federal stockpile of digital currencies to recommending new guidelines for regulation of crypto. A top priority was the Genius Act.

By early February 2025, the bill was circulating in Washington. Later that month, as crypto executives and lawmakers gathered at Washington’s Willard Hotel to discuss the bill, a surprise visitor showed up, according to two people who attended: Tether’s Ardoino. He told his fellow attendees that his company was serious about deterring money laundering, the people said.

In March, Ardoino posted photos of himself at the US Capitol and the White House. He told the New York Times that he’d been careful not to speak with Lutnick after Lutnick’s February confirmation as commerce secretary, to avoid any conflicts of interest.

That same month, Tether hired a Washington lobbyist who’d been representing Cantor Fitzgerald on stablecoin-related issues since 2024: Jeff Miller. Miller served in leadership roles for both of Trump’s inauguration committees, and his firm had become one of Washington’s most successful during Trump’s first term. Throughout 2025, Miller Strategies was paid $570,000 — with $480,000 from Cantor and $90,000 from Tether. “It’s very important that our voice is properly heard,” Ardoino told Bloomberg TV.

Hines, meanwhile, settled into his job. He argued that lawmakers had no right to oppose the president’s wishes, said people familiar with the matter, and pressured them to reach speedy agreements. He also began signaling that he considered concerns about the illicit use of digital tokens to be overblown. “You’re a pretty dumb criminal if you want to use digital assets to do something nefarious because that can be traced publicly in many cases,” he said during an April interview with Bitcoin Magazine.

The earliest drafts of the Genius Act troubled Tether’s competitors and Democratic lawmakers because it walked back restrictions that had been written into the 2024 versions of stablecoin legislation.

In May, a group of Democrats — including those seen as moderates on crypto — revolted, temporarily blocking the measure from advancing. In a closed-door meeting with other Democrats, two people familiar with the matter said, Senator Chuck Schumer of New York implored his colleagues to review records the Biden administration’s National Security Council had compiled about Tether’s practices and make certain the Genius Act provided strong enough safeguards to deter money laundering by US adversaries.

That month, Massachusetts Senator Elizabeth Warren urged other Democrats to reject the latest version of the bill, which she said loosened the rules to further benefit Tether.

Senator Elizabeth Warren questioned the Genius Act’s provisions. Source: Senator Elizabeth Warren/YouTubeHines brushed such concerns aside, according to people familiar with the discussions. He often invoked Trump, saying that the president wanted a deal done soon. Republican legislative leaders pressed on with the bill.

A late hurdle was the timing of the bill’s provisions. During private negotiations, Hines insisted that Republicans refuse to drop the three-year grace period — even though Democrats were seeking to cut it in half. In meetings, he said that Tether wanted three years, said three people familiar with the matter.

Ultimately, Hines prevailed. The July bill signing ceremony brought many of the bill’s important supporters together at the White House.

“Where’s Bo Hines?” Trump asked from the dais, scanning until he spotted him in the front row. “Hi, Bo! And Bo was a great football player, right? Bo was a great football player, one of the better players in college football so I know you from that also.” (Hines was a standout receiver for the North Carolina State Wolfpack in 2014; he subsequently transferred to Yale University, where shoulder injuries hampered his football career.)

Hines stood to a round of applause and sat down. To his immediate right, also in the front row, was Tether’s CEO, Ardoino. One month later, Tether announced that it was hiring Hines as an adviser. Soon thereafter, he was promoted to chief executive of Tether’s new US product called USAT. This new token accounts for just a fraction of Tether’s business, with roughly $186 million of them in circulation. Hines told a crypto conference last year that he expects both USAT and USDT to meet Genius Act standards.

Also seated in the signing ceremony’s front row, between Hines and Vice President Vance, was Lutnick. Trump called on him to stand for applause, praising his work on tariff negotiations. “You have done a great job, Howard,” the president said.

Three months later, Lutnick completed the sale of Cantor Fitzgerald to trusts benefiting his children. The day after it closed, a document was filed in New York that showed Tether had loaned one of those trusts an undisclosed sum of money.

Lutnick has declined to reveal what his children paid for his holdings or whether the loan they received from Tether was used to finance the transaction. That year, Tether had been speaking to investors about a $500 billion capital raise. At that valuation, Cantor Fitzgerald’s potential 5% stake in the company would have been worth $25 billion on paper.

(Updates to say in 15th paragraph that Tether's statement came directly from the company.)