Tether recently officially announced its plan to issue USAT, a compliant stablecoin targeting the U.S. market, and appointed Bo Hines, former head of Trump’s digital asset advisory committee, as CEO. This move is seen as a key strategy by Tether to actively respond to strict regulatory requirements such as the U.S. "GENIUS Act," and it also provides a new compliance paradigm for the development of global stablecoins. The market expects the USAT stablecoin to be officially launched by the end of 2025.

USAT’s architectural design highlights a high degree of compliance and mechanism innovation: it will be issued by Anchorage Digital, a federally regulated crypto bank, with the well-known financial institution Cantor Fitzgerald serving as the custodian of reserve assets and the primary dealer (an institution with priority access to U.S. Treasury transactions).

This mechanism highly aligns with Hong Kong’s Linked Exchange Rate System—Tether is similar to the Hong Kong Monetary Authority (HKMA), overseeing the issuance, security, and value anchoring of the stablecoin; Anchorage Digital is comparable to Hong Kong’s note-issuing banks (e.g., HSBC, Standard Chartered, Bank of China); more importantly, USAT may introduce more regulated banks to participate in issuance in the future, forming a "multi-institution issuing a single stablecoin" model. This also addresses the issue raised in the previous article "Will the Stablecoin Bill Trigger a Financial Tsunami?" that "if every bank issues its own stablecoin, it will lead to market chaos," and coincides with the proposal in the author’s recent article "77 Stablecoin License Applications – Major Opportunities and Challenges for Hong Kong’s Financial Innovation" that "the HKMA should lead the issuance of a USD stablecoin, USHK."

Unlike USDT’s direct self-custody model, USAT emphasizes third-party custody. This design, which separates "issuance, custody, and regulation," significantly enhances transparency and market trust. However, the HKMA custodies USD assets through the Exchange Fund with several major banks, whose names have not been disclosed.

Although the HKMA has not publicly disclosed the specific custodian banks for its USD reserves, its years of accumulated experience in managing the Exchange Fund can still provide a solid institutional foundation for USHK. If the information disclosure mechanism can be further optimized in the future, it will be more conducive to enhancing public trust.

From the perspective of the global stablecoin landscape, the U.S. will form a dual-power compliant stablecoin system with USAT and USDC, both of which will assume a regulatory function in the stablecoin field similar to that of the HKMA in Hong Kong. The efficiency and low-cost characteristics of cryptocurrencies have already challenged the traditional fiat system. The U.S. is further consolidating the advantage of the USD through legislation and compliance innovation. This trend deserves high attention from global financial practitioners, but it is necessary to think outside the traditional financial mindset to avoid missing this historical opportunity.

For Hong Kong, issuing a USD stablecoin, USHK, presents a unique historical opportunity and market potential, as well as a critical window of time, because replacing non-compliant USDT has a time-sensitive window.

Leveraging Hong Kong’s advantages as an international financial center, its mature financial regulatory system, and the market trust built over years of operating the Linked Exchange Rate System, USHK has the potential to replace USDT and become one of the top three USD stablecoins globally. Under optimistic projections, it could capture 40% to 50% of the future global stablecoin market.

In terms of technical path selection, Tether disclosed that USAT will use the Hadron chain as its issuance platform. The Hadron chain is positioned as a multi-chain compliant issuance platform, serving as a tool for multi-chain RWA (Real World Asset) tokenization. It currently supports the Liquid Network (Blockstream’s Bitcoin sidechain, with about 60 nodes, emphasizing privacy and fast settlement), Ethereum (open and transparent), and Avalanche (high throughput), with plans to integrate the TON chain (Telegram ecosystem, enhancing social applications).

The goal is to provide compliant solutions for traditional enterprises to issue tokens. However, it is important to note that the Hadron chain has issues such as opaque code, non-public ledgers, and a lack of long-term testnet trials, making it difficult to accurately assess the overall risk of the project.

In contrast, Ethereum’s openness, high transparency, and ecosystem maturity have been tested by the market, making it a more reliable technical foundation for USDC and future USHK. In the long run, the success of stablecoins must rely on three pillars: transparency, compliance, and trust—whether it is the practical experience of Hong Kong’s Linked Exchange Rate System, the architectural design of USAT, or the author’s theoretical deductions, all corroborate the correctness of the path of "a regulatory body similar to the HKMA + a multi-institution note-issuing mechanism as support."

Hong Kong should seize the opportunity, learn from USAT’s compliance experience, leverage its own institutional advantages, accelerate its pace, and actively promote the research, development, and implementation of USHK. The timing is fleeting. This is not only about financial innovation but also a strategic choice to consolidate Hong Kong’s position in the new global monetary landscape.