USAT, RLUSD, and the Global Race for a Regulated Digital Dollar

Author: Oz Sultan, Source: Quantum Economics, Compiled by: Shaw Jinse Finance

Stablecoins, digital tokens pegged to fiat currencies, have evolved from niche infrastructure in the cryptocurrency space to core infrastructure for global payments, trading, and tokenized finance. Two of the most significant developments of 2025: Tether's announcement of the USAT stablecoin, focused on the US market, and fintech company Ripple's launch of RLUSD, demonstrate how existing market participants and traditional financial players are repositioning for the era of regulation. At the same time, the passage of the U.S. GENIUS Act will lay a legal foundation for the development of compliant stablecoins and reshape the international stablecoin landscape. Why USAT and RLUSD Matter Tether's launch of USAT signals a strategic shift: After years of controversy and scrutiny surrounding the support and governance of its global USDT token, Tether is building a US-based, regulation-first product specifically designed to operate within the new U.S. regulatory framework. USAT will be issued through a U.S.-regulated entity, with custody and reserve relationships structured to comply with federal requirements. This is significant because Tether's scale gives USAT immediate market relevance; if it gains traction, billions of dollars in on-chain liquidity could shift to a token specifically designed to meet U.S. regulations. In contrast, Ripple's RLUSD embodies a different approach: a stablecoin born within a regulated payments infrastructure company that has emphasized regulatory compliance and bank-grade custody from the outset.

RLUSD is designed for enterprise-level channels and cross-border payments. Ripple positions it as fully guaranteed and redeemable, aiming to attract banks, payment processors, and regulated businesses.

The coexistence of issuer-first (Tether) and infrastructure-first (Ripple) approaches reflects the diversity of stablecoin models in the market.

What developments does the GENIUS Act allow?

The GENIUS Act (Guiding and Establishing a National Innovation for a United States Stablecoin Act), enacted in 2025, is the first comprehensive federal payment stablecoin framework in the United States. Its core features include strict reserve requirements (effectively 100% backed by high-quality liquid assets such as cash and short-term U.S. Treasury bonds), monthly public disclosure of reserve composition, compliance with anti-money laundering/know your customer (AML/KYC) regulations under the Bank Secrecy Act, and clear regulatory authority for issuers (certain entities are overseen by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency). It also defines the conditions for foreign stablecoin issuers to enter the U.S. market. By clarifying legal status and regulatory expectations, GENIUS significantly reduces legal and regulatory uncertainty—a major barrier to entry for large financial institutions and mainstream market makers. For companies like Tether and Ripple, the law serves three purposes: 1. A compliance roadmap; it clearly defines the required reserve mechanisms, audits, and disclosures, enabling legitimate product design rather than ad hoc fixes. 2. Providing an on-ramp for institutional participants: Banks and custodians can now structure their stablecoin issuance under a clear regulatory framework, mitigating counterparty and operational risks. 3. Market legitimacy: Compliant stablecoins can more confidently integrate into payment systems, financial infrastructure, and tokenized financial products, thereby attracting capital and use cases away from unregulated alternatives. Global Outlook: Fragmentation, Competition, and Regulatory Imitation These US initiatives come amidst a complex and diverse international landscape. Some jurisdictions, such as parts of Europe, emphasize prudential rules and sandboxes; others are adopting national digital currencies or strictly regulated stablecoins. Two outcomes will emerge in the coming years: 1. Regulatory arbitrage and competing products. Markets with looser or faster licensing regimes may attract non-US stablecoin issuers seeking to scale. Conversely, issuers committed to ensuring US compliance (such as USAT's goal) may forgo regulatory flexibility in exchange for significant market access and reputational advantages. Global players will be forced to choose between speed and legitimacy. 2. Interoperability and agency relationships. Cross-border payments require bridges: regulated US stablecoins require agency relationships, custody arrangements, and legal recognition abroad. The GENIUS Act, which requires foreign issuers to undergo a comparability determination upon entering the US market, recognizes this reality and signals the potential for unified standards. However, true interoperability still requires regulatory coordination across major markets. Central banks in emerging market countries will be watching closely. When local currencies fluctuate significantly, stablecoins (domestic or pegged to the US dollar) can stabilize remittance channels or exacerbate dollarization risks; policymakers will respond by adopting accommodative frameworks or restrictive measures. Therefore, multilateral institutions and payment networks will play a key role in the speed at which cross-border stablecoin channels mature. Impact on the Business and Financial Ecosystem: A regulated stablecoin ecosystem has the potential to provide faster and cheaper dollar-denominated channels for remittances, merchant settlements, programmable finance, and tokenized assets. Banks and custodians that partner with compliant issuers can generate new fee revenue and provide custody and settlement services at scale. At the same time, the higher reserve standards and reporting requirements imposed by GENIUS increase existing costs and may lead to a concentration of issuance among well-capitalized firms and banks. Systemic risk is reduced if reserves are liquid, transparent, and regulated; however, concentration risks and operational dependencies (for example, reliance on a small number of custodians, auditors, or technology platforms) still require vigilant oversight. Monthly disclosures and audit standards are intended to mitigate run risks, but stress testing and crisis response plans will be crucial as stablecoins become infrastructure for the broader financial system. What's next? The emergence of USAT and the maturation of RLUSD symbolize a larger shift: the stablecoin market is moving from a Wild West experiment to a regulated market infrastructure. GENIUS accelerates this transition by providing predictable rules and opening the door to mainstream finance. The likely short-term outcome is a bifurcated market: on one hand, highly regulated, institution-backed stablecoins for payments and settlements within compliant jurisdictions; on the other, a parallel set of offshore or permissionless tokens catering to crypto-native use cases. For businesses, banks, and policymakers, the imperatives are clear: design for interoperability, adhere to robust custody and governance, and coordinate internationally. For users, especially those making cross-border payments and the unbanked, the promise is faster and lower-cost access to US dollar liquidity. Achieving this goal will depend on regulatory coordination, technical standards, and whether new participants can balance compliance with usability.

Therefore, the next few years will be a critical test of whether stablecoins can become both a story in the cryptocurrency space and a cornerstone of secure, regulated, and widely used global digital finance. The GENIUS Act provides a blueprint for the United States; it will be up to the market, technical experts, and international regulators to jointly paint the specific picture.