Tether Unveils USAT | New Dollar-Backed Stablecoin Sparks Controversy
Edited By
Ritika Sharma
Tether has announced the launch of USAT, a new dollar-backed stablecoin, raising eyebrows amid ongoing concerns about the reserve backing of its existing token, USDT. As of January 2026, Tether asserts this move aims to comply with regulatory expectations under the GENIUS Act, stirring debate within the crypto community.
An Overview of the Launch
The launch of USAT is seen as a response to increasing scrutiny over USDT's reserves, which have faced allegations of opacity. Critics have long questioned Tether's reserve quality and the frequency of its audits. While USDT holds a staggering market cap of $186 billion, the introduction of USAT prompts serious concerns about its reliability.
"If USAT is launched to provide credible reserves reporting, doesn’t it raise serious questions about the quality of reserves with the USDT?" - Commenter on forums.
Notably, Tether has accelerated its purchases of gold in recent months, acquiring 27 tons valued at $4.4 billion in the last quarter of 2025. This move seems aimed at bolstering its reserves amid intensifying inflation and asset quality concerns.
Community Reactions
The reaction from the crypto community has been overwhelmingly skeptical.
Transparency Concerns: Many people are voicing doubts over Tether’s commitment to transparency.
Skepticism About Audits: Commentary points to Tether's audits being infrequent and performed by a relatively unknown firm, BDO, specifically calling into doubt their reliability.
Criticism of New Launch: Some users have condemned the launch of USAT, viewing it as a confirmation of pre-existing concerns regarding Tether's reserve practices.
"If USDT reserves were fine, they could've just improved transparency launching USAT basically confirms that," stated a concerned voice on user boards.
Key Takeaways 📊
⚠️ Many people perceive USAT as a red flag pointing to ongoing issues with USDT reserves.
📈 Tether has reportedly increased gold purchases to enhance its reserve strategy.
💬 "These guys are pulling the biggest scam ever," an outspoken commenter lamented.
The emergence of USAT may signal an urgent need for Tether to address ongoing transparency issues or risk further undermining trust in its stablecoins. With the growing market scrutiny, how Tether navigates these challenges will likely define its future in the volatile crypto market.
Speculating the Road Ahead
There's a strong chance Tether will intensify its efforts to improve transparency regarding its reserves. This could materialize in more rigorous audits and clearer reporting practices, as they face mounting pressure from investors and regulators alike. Experts estimate around a 60% probability that Tether will adopt measures to restore confidence, possibly including partnerships with more reputable auditing firms. Furthermore, as inflation continues to impact the market, Tether may invest more in tangible assets like gold to strengthen its collateral, although some people remain doubtful about its long-term viability.
A Tale from the Past
Looking back to the early 2000s, we can draw an unexpected parallel with the collapse of major energy companies due to reliance on shaky financial practices. Companies then advertised strong positions despite questionable reserves and oversight, much like Tether today with its USDT. When scrutiny increased, these companies faced backlash, prompting some to pivot and commit to transparency. This historical example shows how markets can swiftly turn against firms perceived as withholding vital financial truths, echoing the current skepticism toward Tether and its launch of USAT.