Tether, the company behind the world’s largest stablecoin USDT, is making a big move into the American market. On Friday, CEO Paolo Ardoino announced the upcoming launch of a new U.S.-focused stablecoin called USAT, expected to go live by the end of the year.

The new project will be run by Bo Hines, a former White House digital assets official, who will serve as USAT’s CEO. Unlike Tether’s global USDT, USAT is being structured as a U.S. company, with headquarters in Charlotte, North Carolina.

What is USAT?

According to its official website, the new stablecoin is designed to give users the “power of the dollar” in digital form. It will be:

-  Fully backed by liquid reserves such as U.S. dollars and short-term Treasuries

-  Issued under U.S. law, specifically the recently passed GENIUS Act, which created the first federal regulatory framework for stablecoins

-  Capable of instant, peer-to-peer transactions without intermediaries

Unlike USDT, which is issued offshore, USAT will be issued directly from within the U.S. by Anchorage Digital Bank, a federally chartered crypto bank founded in 2017. Custody services will be provided by Cantor Fitzgerald, a major Wall Street firm.

Why Now?

Ardoino described the launch as a response to growing competition in the U.S. market, particularly from Circle’s USDC, which recently went public in a blockbuster IPO.

“I think it’s a very exciting moment because we were under severe pressure from competitors that want to create a monopolistic environment in the United States,” Ardoino said at the New York press event. “We believe that Tether is the best product in the market.”

Hines echoed the sentiment: “We want people to know that Tether is here to participate in the U.S. economy in a huge way. I think our expansion will be exorbitant over the course of the next 12 to 24 months.”

The Bigger Picture

Tether already plays a massive role in global finance. Its flagship stablecoin, USDT, has a market capitalization of more than $169 billion (CoinGecko). The company is also one of the largest buyers of U.S. Treasury bills, holding more than $33 billion worth as of 2024.

Analysts at J.P. Morgan recently noted that stablecoin issuers could become the third-largest buyers of U.S. government debt in coming years — an eye-opening prospect for both Wall Street and Washington.

The U.S. government has been warming up to stablecoins under the Trump administration. The GENIUS Act, signed into law in July, requires that all stablecoins be backed by high-quality liquid assets and that issuers publish monthly reserve disclosures.

A History of Scrutiny, and an Active Investigation?

Tether’s U.S. expansion comes despite its history of regulatory run-ins. In 2021, the company settled with the New York Attorney General’s office over allegations that it misled investors about the reserves backing USDT, agreeing to provide quarterly reports.

More recently, The Wall Street Journal reported that U.S. authorities were looking into whether Tether had violated sanctions or anti-money-laundering rules. Ardoino denied that the company is under investigation.

What’s Next

If USAT launches on schedule, it will directly challenge Circle’s USDC for dominance in the American stablecoin market. By anchoring the project within U.S. regulations and institutions, Tether is clearly signaling that it wants to be more than just the world’s leading offshore stablecoin issuer.

Personally, I find stablecoins hard to get excited about. Of course, I use them regularly and agree with their usefulness - but all I need to be fully satisfied with one is that it holds its value. If several prove to do this reliably, I don't care which one I use. It's just a bit odd seeing competition between coins  that literally do the exact same thing.

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Author: Oliver Redding
Seattle Newsdesk  / Breaking Crypto News

Former president Donald Trump continues to repeat his stance as the crypto-friendly candidate, and it's resulting in votes and donations from the tech world.

Trump has seen the light. 5 years ago the former President was saying crypto was “a disaster waiting to happen” but since then has made a number of pro-crypto statements. 

Trevor Traina, ambassador to Austria during the Trump Administration and current tech executive, tells Reuters that Trump said “he would be the crypto president” at a recent San Francisco fundraiser.

Unexpected Support in 'Liberal' Silicon Valley

As someone in Silicon Valley, I never expected to hear that Trump was in San Francisco, raising millions from the tech elite that were clearly against him in the previous two elections.

But just three days ago, Silicon Valley venture capitalists David Sacks and Chamath Palihapitiya hosted the former president at Sacks' mansion in the wealthy Pacific Heights neighborhood, where Trump gave a speech, followed by a dinner and reception. The tickets started at $50,000, and the event sold out, ending in $12 million being raised for the campaign.

Trump Arriving in San Francisco earlier this week.

Crypto is among a list of policies that have 'turned off' those now supporting Trump in a city that voted 85% for Biden.

All Happening While Biden's Administration Continues to Advocate Policies that Aren't Just Bad for Crypto - They Expose a Complete Lack of Understanding of How Crypto Works

For example, the first crypto-related proposals exposed that the Biden administration viewed wallet providers the same as banks, saying they should be required to verify the identities of all users. In reality, wallets are simply software that runs entirely on the user's end, different from a bank in every possible way.

The creator of a legitimate crypto wallet is both blind and powerless when it comes to who uses it and what those users are doing. They cannot help the government seize someone's crypto, even with a warrant, because they literally cannot access it. They also cannot prevent anyone from using the wallet they created - if the file to install it is accessible, anyone can use it.

In other words, it is both completely pointless to require wallet creators to demand information from users they have no authority over, and there is no reason for users to comply when ignoring these new requirements has the same end result - them being free to continue using whatever wallet they want.

No one can be surprised that the industry rightfully fears the end result of people writing new laws intended to regulate something they clearly do not understand.

As Trump Warmed Up To Crypto, His Campaign Made Sure to Show It

In 2022, the announcement that he would be running again came with the launch of Trump NFTs on the Ethereum-based platform OpenSea.

In 2023, his financial disclosure filed with the Office of Government Ethics included a crypto wallet with up to $500,000 worth of assets in it - this wallet's value recently broke $5 million in value. Since the wallet address became known, both random users and projects have gifted or airdropped coins to it.

Then last month, his campaign announced they will accept crypto donations for the 2024 election.

There are Legitimate Reasons Any US Leader Should Support Crypto

One major contributing factor to the US's global power is the strength of the US dollar, and one major reason the dollar is so strong is its status as the global 'reserve currency' as well as the official standard currency for purchasing oil from the world's largest supplier - OPEC in the Middle East.

When the global economy is in turmoil, as seen recently during the COVID pandemic, many nations converted their treasury to US dollars. The Federal Reserve was overwhelmed initially, having to scramble to fulfill other countries’ central banks' demands for what is seen as the world's most stable currency.

That word 'stable' is one crypto investors are familiar with - as the US dollar is finding yet another market where it has become the standard for investors looking for a stable currency to both cash out and re-enter trades from.

In fact, when it comes to cryptocurrencies tied to standard fiat money, the top 16 stablecoins are all based on the US dollar, with 'STASIS EURO' at #17 and less than $1 million in daily transactions. The top stablecoin USDT has done $39 billion in the same 24-hour time period.

While the crypto market trades digital versions, the two that account for the overwhelming majority of stablecoin transactions, USDT and USDC, are both publicly audited companies that verify they hold the money to back up the coin. This means as we've watched stablecoin usage skyrocket over the last few years, offline this created new real-world demand for US dollars.

You would think this would result in crypto having no effect on the election, as both sides would support its continued growth. Regardless of what your opinions may be on other issues - it's a fact that only one candidate seems to be getting this one right.

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Author: Ross Davis
Silicon Valley Newsroom
GCP | Breaking Crypto News

Ethereum just lost one if it's biggest bragging points, and its transition from a deflationary to an inflationary asset marks a potentially pivotal moment in its trajectory. While the platform continues to be a dominant player in the decentralized finance (DeFi) space, these economic and market shifts warrant close observation by investors and stakeholders. 

What Happened?

Ethereum's shares the most common cause of currency inflation with governments around the world, specifically when they print too much money. There have been 68,000 new ETH issued, compared to its burning 38,000 ETH over the last 30 days - add this excess together with a bearish month, and the additional supply enters the ecosystem as inflation.

Ethereum has a system where a portion of the transaction fees (or "gas") is burned, reducing the overall supply of ETH, while another portion compensates validator nodes.

Typically this causes ETH to be deflationary - that is, when network activity is stronger, the amount of ETH burned can surpass the amount issued.

Some Perspective...

It's crucial to note that Ethereum's annual inflation rate remains relatively subdued at 0.3%, especially when compared to Bitcoin's 1.6% and certain fiat currencies, which hover around 3.7%.

Bitcoin has been categorized as inflationary due to its capped supply of 21 million coins and the halving of its block rewards approximately every four years, which restricts its issuance and, by extension, its inflationary potential. In contrast, fiat currencies, like the US dollar, can be issued without an upper limit, leading to inflation when the supply outpaces demand.

So, while 0.3% is an insignificant amount and there's no need for investors to modify their outlooks, yet, this is something worth keeping an eye on.  Unless hit with large downturn (which I haven't seen anyone predicting) Ethereum can re-take it's 'deflationary' title fairly easily. 

Plus, For the First Time in YEARS - Ethereum Users Didn't Pay the Most in Total Transaction Fees...

Another interesting thing stood out when reviewing Ethereum's previous month - a significant drop in total transaction fees. After 3+ years embarrassingly high, sometimes absurd fees - this is a good thing.

In the last 30 days, the Tron network generated $87.4 million in fees and $65.8 million in token incentives, resulting in net profits of $21.6 million. Ethereum, on the other hand, generated $82.2 million in fees but offered token incentives of $82.9 million, leading to losses of $20.6 million. "There's a lot of projects taking direct aim at Ethereum, with their main goal being to transfer some of ETH's market share to themselves' said one blockchain consultant on Reddit.

Other platforms including Lido Finance ($46.9 million), friend-tech ($30 million), Bitcoin ($27 million), Uniswap ($23 million), Aave ($8.8 million), and BNB Chain ($ 8 million), surpassed Ethereum in generating fees.

Global Crypto Press was the first crypto news outlet to cover this story back in February when all we had was a single inside source. Three months later, our source's information seems to have been 100% accurate, as the 'rumors' from then are now part of official statements made by the government of Hong Kong.

For those just joining the story here, the important thing to know is that in 2021 China implemented a crypto trading and mining ban and ejected any company that existed for those purposes. China went from the country with the most mining power, to completely off of the top 10 list, with small countries like Malaysia and Iran now outperforming them.

You may wonder - why is that surprising? If they banned trading and mining, isn't it predictable that a sudden drop in mining hashpower coming out of China would follow? 

It's a fair question, and most people did predict the effect of a Chinese ban on crypto... at least once among the 6 times they 'banned' crypto before this, just to have its popularity continue to grow. 

But the 2021 ban was unlike any of their previous attempts, it was backed with enforcement as businesses that continued to leave their bitcoin miners running found themselves being raided, and their hardware seized. Now, with the choice to risk being next or relocate, companies either moved to other countries or simply sold their mining hardware to a company that was.

This is how the situation remained, until now.

Now, crypto appears to be on the verge of returning to China via Hong Kong...

Hong Kong is a unique situation, once fully independent of China, they are now officially 'part of China' - but unlike any other area of the country they maintain the ability to pass their own laws and remain economically independent from the federal government.  

It's with these additional freedoms that Hong Kong has just announced they will begin issuing permits to crypto based businesses beginning June 1st.

3 Things We Will Likely See Happen Almost Immediately...

- First, an increase in the overall demand for cryptocurrencies. China has one of the largest economies in the world, and if a significant portion of its population begins investing in or using cryptocurrencies, it could drive up the price of these digital assets. This could potentially lead to a new bull market in cryptocurrencies, benefiting investors and businesses in the sector.

This is why Binance CEO CZ tweeted that historically news like this is followed by a bull run. 

- Secondly, increased innovation in the crypto space. China is known for its technological prowess, and if Chinese companies are allowed to operate in the crypto space, it could lead to new technological advancements and applications for blockchain technology. 

Unfortunately, Chinese technological advances are often the result of stolen data as the nation infamously targets tech companies around the globe with the intent of recreating propritaty tech.

- Third likely impact we'll see is this decision influencing other countries' policies towards crypto. If China, once a staunch opponent of cryptocurrencies, reverses this to allow them  it could encourage other countries that have been hesitant about cryptocurrencies to reconsider as well.

I can't think of any examples of countries willingly staying out of a market both the US and China are in.

One Concern Remains..

While Hong Kong still maintains some independence from the rest of the Chinese Government, Laws they pass in Hong Kong can be vetoed by the ruling party.

We brought this up when speaking to our source there nearly 3 months ago, that portion of the article reads:

...we're hearing that Hong Kong leaders are NOT being met with disapproval from China's leadership in Beijing "there's nothing to indicate mainland officials don't want this to happen, and I believe we're well beyond the point where they would make their stance known" our source explained.

Beijing quietly allowing this to happen may be thanks to some of China's wealthiest business leaders, who have been complaining to officials about being restricted from a market with huge growth potential..."

At the time we published that article Hong Kong was still several steps away from this becoming a reality, now they're on the final step having announced their intention to issue permits for crypto companies to operate there starting June 1st.

It's a situation where approval from the ruling Communist Party will come in the form of silence. Hong Kong is providing a way for the ruling party to reverse their 2021 crypto ban without the President or other high ranking party leaders having to acknowledge it. 

Considering we're just 3 days away from Hong Kong officially open to issue permits for crypto companies to provide their services to citizens, we believe if Beijing disapproved they would have made that clear by now.

In our opinion, this is actually going to happen.

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Author: Adam Lee 
Asia News Desk 
Breaking Crypto News

 

Ethereum's Shapella upgrade went live earlier in the week, along with this came a large amount of previously locked tokens becoming available for trading - all these coins potentially hitting the open market had some predicting a sell-off. 

Those Sell-Off Predictions Appear to Have Been Wrong...

Concerns about a potential sell-off from those who locked up their ETH coins for staking now gaining access to their ETH again, making them tradable.

These locked coins total 15% of the total ETH supply - if just half wanted to sell, it wouldn't have been pretty.

Instead, the Opposite - Ethereum is up 9.58%...

The upgrade has been followed by two days of price gains for ETH - up nearly 10% since the upgrade went live.

Many who said a full blown 'sell-off' was unlikely were still ready to see at least a small dip in Ethereum's price, and thinking a small dip would happen does make sense based on standard supply and demand expectations - instead, Ethereum's been on the rise since the upgrade happened 2 days ago.

The reason even we were predicting a small price decrease was that many people would be taking a loss - these people purchased in the Aug 2021 - April 2022 timeframe when sales were highest and so was ETH's $3000+ price.  We assumed these people would continue holding on to their tokens for now, they see it slowly coming back up to those prices and would rather avoid taking a loss. 

A Maturing Market?

In previous years it feels like just the fear of a potential sell off would then actually trigger that sell off, this feels like the market is maturing. As more people get familiar with cryptocurrency and its uses, they'll become more comfortable holding onto their tokens, even during periods of potential volatility.

Overall, another strong week for crypto!

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Author: Mark Pippen
London News Desk 
Breaking Crypto News