Tether Launches Institutional Stablecoin for Interbank Settlements as GENIUS Act Drives U.S. Expansion

Tether Holdings SA is recalibrating its business strategy to target the U.S. institutional market, shifting focus from its retail-driven USDT to a new stablecoin designed for interbank settlements, corporate treasury management, and tokenized asset transactions. CEO Paolo Ardoino confirmed this pivot during a Bloomberg Television interview, emphasizing that the company is finalizing a domestic strategy following the enactment of the GENIUS Act, a U.S. crypto regulation law signed by President Donald Trump. The act mandates full reserve backing, routine audits, and anti-money laundering (AML) compliance for stablecoin issuers, aligning Tether’s operations with evolving regulatory frameworks [1].

Ardoino highlighted the GENIUS Act as a critical enabler for institutional adoption, stating it addresses prior regulatory ambiguities that hindered stablecoin integration into traditional finance. The new institutional-grade stablecoin, distinct from USDT, aims to streamline cross-border payments and interbank liquidity solutions. Tether’s existing USDT, with a market cap of $162.04 billion and 4.17% dominance, remains the most traded cryptocurrency by volume but is now being complemented by a product tailored to institutional-grade use cases [1].

The strategic shift reflects Tether’s intent to leverage its infrastructure in emerging markets while navigating U.S. regulatory demands. Unlike Circle’s USDC, which has pursued public partnerships and compliance frameworks, Tether has opted to avoid a public listing, prioritizing growth through institutional collaborations. Ardoino noted that the GENIUS Act’s clarity could accelerate merchant and financial institution adoption of stablecoins, particularly in scenarios requiring instant settlement and liquidity efficiency [1].

Regulatory compliance is central to Tether’s renewed focus. The company has faced past criticism for delayed audits but has committed to meeting the GENIUS Act’s requirements, including routine transparency reports and reserve verification. Ardoino forecasted that adherence to these standards could drive a tenfold expansion in USDT’s supply, potentially exceeding $1 trillion, though this hinges on sustained regulatory alignment and market trust [2]. The act’s enforcement of full reserve backing and AML protocols also raises the bar for competitors, compelling other stablecoin issuers to adopt similar compliance measures.

Tether’s market influence extends beyond stablecoins. Its investment portfolio includes over 120 companies, such as Bitdeer and CityPay, signaling a broader ambition to diversify into blockchain infrastructure and payment solutions. Recent partnerships, like Rezolve AI’s integration of stablecoins into retail payments via the Brain Suite platform, underscore Tether’s push to penetrate the $30 trillion retail payment market. This collaboration leverages cloud infrastructure from Microsoft Azure and Google Cloud, aligning with institutional-grade scalability demands [3].

Analysts caution that regulatory implementation and operational execution remain key risks. While the GENIUS Act provides a framework, consistent compliance and transparency will be critical to maintaining trust in Tether’s reserve structure. The company’s ability to navigate these challenges will determine its long-term competitiveness in a market where stablecoins increasingly compete with traditional liquidity instruments like U.S. Treasuries [3].

Sources:

[1] [Tether CEO Says Stablecoin Issuer Is Making Plans to Do Business in U.S.](https://www.bloomberg.com/news/articles/2025-07-23/tether-ceo-says-stablecoin-issuer-is-making-plans-to-do-business-in-us)

[2] [Tether Could Potentially Expand USDT Supply Tenfold Amid New Federal Stablecoin Regulations](https://en.coinotag.com/tether-could-potentially-expand-usdt-supply-tenfold-amid-new-federal-stablecoin-regulations/)

[3] [Rezolve AI and $150B Tether Aligned as U.S. Stablecoin Law Ushers In...](https://www.stocktitan.net/news/RZLV/rezolve-ai-and-150b-1-tether-aligned-as-u-s-stablecoin-law-ushers-in-wlw9ghzz29m8.html)