Tether Launches Regulated USA₮ as Institutions Deepen DeFi Ties

Tether has taken a decisive step toward regulatory alignment by introducing USA₮, a dollar-backed stablecoin designed specifically for the United States market. The launch, which took place on January 27, represents the company’s most significant compliance-driven move to date. Unlike Tether’s globally used USD₮, the new token operates under the framework of the GENIUS Act and is issued through Anchorage Digital Bank, a federally chartered institution. The reserves backing USA₮ are held under custody arrangements with Cantor Fitzgerald, reinforcing its regulatory positioning.

Early blockchain data indicates that approximately 20 million USA₮ tokens are already in circulation, with around $90 million in transfer volume. Activity has been concentrated among institutional wallets rather than retail users, signaling that the initial focus is on professional and enterprise adoption. Distribution is being supported by major crypto platforms, including Kraken, OKX, Bybit, Crypto.com, and MoonPay.

This development places Tether in a unique dual-structure position. The company now operates a permissionless offshore dollar stablecoin alongside a federally compliant domestic version. This strategy directly challenges Circle’s USDC, which has long marketed itself as the stablecoin of choice for institutions seeking regulatory clarity. By introducing USA₮, Tether is aiming to combine its dominant market presence with formal US regulatory acceptance.

Opening Doors for Banks and Fintechs

The launch of USA₮ potentially unlocks access to banks, fintech companies, and payroll providers that previously avoided Tether due to regulatory concerns. While USD₮ continues to dominate high-volume trading globally because of its deep liquidity, USDC has traditionally attracted institutions prioritizing compliance. USA₮ is positioned between these two models, offering Tether’s established liquidity and brand recognition within a framework acceptable to US regulators.

Asset Managers Expand Into DeFi Infrastructure

Traditional finance firms are also increasing their presence within decentralized finance. On January 26, Bitwise Asset Management, which oversees more than $15 billion in assets, announced its entry as a vault curator on Morpho. Through this role, Bitwise is launching stablecoin-based strategies targeting yields of roughly 6 percent annually, generated via overcollateralized lending.

Morpho currently holds deposits exceeding $10 billion and has produced more than $14 million in fees for vault curators. Under this structure, users retain custody of their assets while Bitwise manages strategy design and risk parameters. The model has been compared to actively managed fixed-income products, with the added benefits of transparency and non-custodial control. This approach reflects a shift toward sustainability and risk discipline following the collapse of yield products that relied on hidden leverage and opaque exposures.

Innovative Capital Structures and Tokenized Assets

Innovation has not been limited to stablecoins and lending. Andre Cronje’s Flying Tulip project has raised a total of $225.5 million, including $75.5 million in a recent funding round that valued the project at a fully diluted valuation of $1 billion. On-chain data shows about $53 million deposited by roughly 1,900 investors, with tokens priced at $0.10 and fully unlocked at the token generation event.

Flying Tulip introduces a novel mechanism by granting token holders a perpetual option to redeem tokens at their original purchase price, with redeemed tokens permanently removed from circulation. Operational expenses are funded through treasury yields generated from decentralized finance strategies, rather than through investor principal. This structure resembles a capital-protected financial product more than a conventional token sale.

Tokenized Gold and AI Infrastructure Gain Momentum

Tokenized commodities are also gaining traction. On January 27, Theo launched thGOLD, a yield-bearing gold token that provides one-to-one exposure to LBMA spot gold along with an estimated 2 percent annual yield derived from gold-denominated lending. The broader tokenized gold market has expanded rapidly, with market capitalization increasing from around $1 billion to over $5 billion year over year, while decentralized exchange trading volumes surpassed $1 billion in January.

Meanwhile, Ethereum’s infrastructure continues to evolve. ERC-8004 went live on January 29, introducing native standards for autonomous AI agents through on-chain identity, reputation, and validation registries. More than 15,000 agents registered immediately, reinforcing Ethereum’s role as a foundation for machine-to-machine commerce.

Looking Ahead

The next key development will be the pace at which institutional capital flows into these emerging structures. Adoption of USA₮ by US financial institutions and performance metrics from Bitwise-managed Morpho vaults are expected to serve as early indicators of how quickly regulated crypto infrastructure gains mainstream acceptance.

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