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Stablecoins gain U.S. momentum: GENIUS Act mandates Treasury backing, creating government debt demand while emergence of Tether’s USAT and Hyperliquid’s USDH signal market expansion

September 16, 2025 //  by Finnovate

Stablecoins, digital tokens pegged to traditional currencies, have evolved from niche tools for cryptocurrency traders to major pillars of the global financial ecosystem. In the United States, the sector has reached a turning point with the passage of the GENIUS Act, a law created in 2025 to establish a federal regulatory framework for stablecoin issuers. Adding momentum is Tether’s announcement of USAT, a U.S. based and regulated dollar-backed token that signals growing competition and government engagement. The global stablecoin market is almost $300 billion in capitalization, with Tether’s USDT dominating at over $169 billion. Other players, such as Circle’s USDC and PayPal’s PYUSD, have carved out niches in institutional payments and consumer-facing applications. Tether’s flagship token, USDT, has become the de facto “digital dollar” in many emerging markets, particularly in countries with weak local currencies. One example being Hyperliquid, a decentralized exchange, announced plans that they are preparing to launch USDH, a native stablecoin whose issuer will be chosen through community governance. By requiring issuers to back tokens with Treasuries, the GENIUS Act effectively turns the stablecoin market into a demand engine for U.S. government debt. For global users, this means increased access to dollar-denominated assets without traditional banking. With the GENIUS Act providing a clear regulatory framework and new offerings like Tether’s USAT entering the market, the sector is poised for deeper integration into the U.S. financial system.

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