Circle Faces New Test As Tether Targets U.S. Institutional Stablecoin Market

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• Tether has launched USAT, a U.S.-regulated stablecoin aimed at institutional clients.

• The move introduces the first major direct competitor to Circle Internet Group’s USDC in the U.S. institutional market.

• USAT is being rolled out in partnership with established financial institutions, increasing competitive pressure on Circle.

Circle Internet Group (NYSE:CRCL), issuer of USDC, now faces a new rival in its core U.S. institutional segment, just as its stock trades at $72.84. Shares have seen a 9.5% decline over the past 30 days and a 12.7% decline year to date, which frames how investors may interpret this competitive challenge. For readers tracking stablecoin providers, this development serves as a test of how defensible Circle’s position in regulated U.S. markets may be.

For you, the key questions are how Circle responds, where it chooses to focus, and how customers react to having a second large U.S.-regulated option. Future updates on client adoption, product features, and any changes in regulatory engagement could matter more than early headlines about the launch itself.

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How Circle Internet Group stacks up against its biggest competitors

Tether’s launch of USAT puts a regulated rival directly in the same U.S. institutional lane as Circle’s USDC, and that matters because those clients care about compliance, liquidity, and integrations rather than brand alone. For you, the key issue is whether USAT simply shares the market with USDC or starts to displace it in core use cases like exchanges, payments providers, and onchain finance, where players such as Coinbase, Stripe, and large banks already shape which tokens get scale.

The move comes just as Circle has been positioning USDC as core infrastructure for machine to machine payments, tokenized treasuries through USYC, and onchain FX via StableFX, so a credible rival in regulated dollars tests how durable that broader platform story really is. It also sits alongside other interest, including institutional attention from firms like Ark Invest and the Mizuho upgrade that highlighted Polymarket activity as a USDC growth driver, which shows investors are watching how quickly Circle can broaden beyond simple reserve income.

• ⚠️ A regulated USAT gives institutions a second large issuer to work with, which could dilute USDC’s share if exchanges, payment networks, or banks choose to support both and rebalance flows over time.

• ⚠️ Analysts have already flagged competition in dollar stablecoins as a key risk, and a Tether product that is designed for U.S. institutions brings that risk closer to Circle’s core markets.

• 🎁 Circle’s existing work with tokenized treasuries, Arc Network, and global payments rails could help anchor clients that want one issuer for both stablecoins and broader onchain financial infrastructure.

• 🎁 If demand for regulated stablecoins continues to widen, the overall pool of onchain dollars could grow enough for both USDC and USAT to scale without immediately pressuring Circle’s existing relationships.

From here, keep an eye on any updates about USAT integrations with major exchanges, banks, or payments firms, and compare that with Circle’s own progress on StableFX, USYC, and institutional onboarding, as that will show you whether this is a share shift or just market expansion. For a fuller picture of how different investors are thinking about Circle’s long term role, have a look at the community narratives on its company page at check what other investors are saying about Circle’s story.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include CRCL.

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