Tether Comes Home: USAT and the New Onshore Stablecoin Era

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Introduction

Welcome to the Tokenized newsletter, brought to you by the creators of the Tokenized Podcast Simon Taylor of Fintech Brainfood, Pet Berisha of Sporting Crypto, and Shwetabh Sameer of Molten Ventures.

We are the newsletter for institutions that need help preparing for a Tokenized future.

We run through the headlines every week, what it means for you and a market readout. Always with an institutional, business-focused perspective. 

Join us every week as we meet your Tokenization needs.

In This Week's Edition:

💬 Simon's Market Readout: Tether Comes Onshore - The launch of USAT marks Tether's first domestic US stablecoin. What does it mean for the Circle-Tether competitive dynamic, and can Tether bridge its crypto-native clients into regulated US flows while managing the compliance magnifying glass?

💸 Zerohash Walks Away from $2 Billion - Infrastructure layer declares independence. After rejecting Mastercard's acquisition offer, Zerohash raises $250M at $1.5B valuation. When infrastructure says no to acquirers, they're betting the market isn't mature yet.

💸 Superstate Raises $82.5M - Days after NYSE announced tokenization plans, Superstate closes a major Series B to become the transfer agent for tokenized securities. Is this validation or competition?

🚀 Ledger Plots $4B New York IPO - The French hardware wallet maker prepares for a NYSE listing at 2.7x its 2023 valuation. Wall Street's appetite for crypto infrastructure gets tested.

🚀 Mesh Hits $1B Valuation - Who connects Rain's stablecoin cards, Stripe's Tempo chain, and Ripple's ecosystem? Mesh raises $75M to build the interoperability layer that makes fragmented stablecoin systems talk to each other.

🏛️ UBS Plans Crypto Trading for Wealthy Clients - Seven years after warning of "total loss," the world's largest private bank is preparing to offer Bitcoin and Ethereum trading. Not because they changed their mind, but because their clients did.

Simon’s Market Readout 💬 

The launch and announcement of USAT by Tether - the first domestic stablecoin for the United States - feels like a watershed moment in time.

Tether has long been the offshore dollar, the eurodollar for the Global South, the way that people could get access to digital dollars wherever they live in the world. To escape from hyperinflation. To pay each other easily. And frankly, sometimes, occasionally sadly, for criminals to hold on to dollars - not unlike paper banknotes that exist offshore and have existed offshore for criminal activity for a very long time. But stablecoins have also been a lifeline to the Global South.

In many markets, people want to be paid in dollars because they believe in the safety and security of it. Bringing that access with a brand like Tether, I would argue, on net, has actually been good for financial inclusion. There's a generation of people in Asia Pacific and India and the subcontinent that are going through their Great Gatsby moment. They are entering the middle class, and they are becoming global citizens. As they look to do that, they start to think internationally. And as they think internationally, they want an internationally available currency and payment method. Tether is strategically placed to do that.

But they were historically locked out of the capital markets flows inside the United States. Circle, by contrast, positioned themselves remarkably well by being the onshore dollar, by being regulated as an MTL, by going public in the United States. They did a lot of hard work to make that happen.

Tether has now gained ground with the launch of USAT.

The interesting question is: can they gain traction? Tether with crypto-native institutions certainly has a lot of traction. Those institutions tend to operate on Wall Street, so being able to repatriate a lot of their Tether through USAT could potentially be a commercially attractive option. They've built a bridge to the world that is already working in Tether and wants to come onshore and offshore.

But pay attention to that bridge. There are stories of Tether being used for money laundering, just like there have always been with cash. And Tether, for its part, does its best to block as many sanctioned wallets as possible. But the horrible stories, the criminality, and the sanctions evasion remain, so the magnifying glass will be on them and any institution that operates with them at scale.

I, for one, hope this is them coming into the light. Them continuing to improve the controls and the maturing of the stablecoin ecosystem more broadly. Tether is increasingly looking more like a bank for the internet than a stablecoin issuer in any true sense. This is an organization that has stakes in Juventus FC, is buying gold at a remarkable rate, and could potentially be the private alternative to a central bank for the Global South.

Whether that plays out or sounds like a crazy idea very much depends on how you view the reordering of the global economy that we seem to be slap bang in the middle of.

That I'll leave to you, dear reader.

Stories You Can't Miss 📰

💸 Zerohash Walks Away from $2 Billion - Infrastructure Layer Declares Independence

Key Points:

• Zerohash raising $250 million at $1.5 billion valuation after walking away from Mastercard's ~$2 billion acquisition offer

• Only one of these deals closed. The other two fell apart for different reasons — but Zerohash actively rejecting a $2 billion offer is the clearest signal yet about how infrastructure companies are valuing their own futures

• Mastercard may still take a strategic stake; investment discussions reportedly ongoing

• Client roster now includes Interactive Brokers, Morgan Stanley's E*Trade (launching H1 2026), BlackRock's BUIDL, Stripe, Franklin Templeton, DraftKings, and as of last week, Gusto for contractor payouts

• MiCA authorization secured from Netherlands' AFM — one of the first US-based crypto infrastructure providers with European market access

The Tokenized Take:

We can clearly see the current pattern:

One closed. Two rejections. As we covered this last week, the infrastructure layer is sending a message: we're not selling at these prices because we think there's substantially more to capture.

Circle ran this playbook before their June 2025 IPO. Ripple offered up to $5 billion. Coinbase explored acquisition talks. Circle evaluated offers, then chose independence and went public. The strategy: let strategic acquirers validate your value through competitive bidding, then bet on your own execution.

Zerohash appears to be running the same play, but the bet is different. Circle was banking on USDC adoption. Zerohash is betting that enterprise companies embedding blockchain infrastructure behave nothing like crypto startups hoping for an exit.

The difference matters. Enterprise clients mean multi-year contracts, rigorous compliance requirements, and sales cycles that filter out weak competitors. Once Morgan Stanley integrates Zerohash into E*Trade, they're not ripping it out in 18 months. That stickiness makes forward revenue far more predictable and potentially makes $2 billion look cheap in hindsight.

The investor-to-client conversion pattern tells you everything. Morgan Stanley invested in September. Weeks later, they announced Zerohash would power crypto trading across E*Trade's 15 million clients. They didn't invest for financial returns. They invested because they planned to deploy operationally.

So why say no to a 100% premium on your last valuation?

Three ways to read this:

1. The market isn't mature yet. We're still in early adopter territory. Regional banks, traditional corporations, non-crypto treasuries - the early majority hasn't arrived. $2 billion today might look modest compared to a $5-10 billion outcome in 24-36 months if enterprise adoption accelerates the way these companies expect.

2. Independence preserves distribution neutrality. Inside Mastercard, Zerohash becomes a competitor to potential bank clients. Would Morgan Stanley keep using infrastructure owned by a card network that competes with them on payments? Probably not. Neutrality isn't just philosophical - it's what keeps the client roster intact.

3. Strategic stakes beat full acquisition. Reports suggest Mastercard may still invest rather than acquire. Capital and validation without losing independence. Best of both worlds if you believe the upside is still ahead.

The Gusto announcement timing looks deliberate. One week before news breaks that you walked away from $2 billion, you announce a flagship payroll partnership serving 400,000+ small businesses. Signal to the market: we're not desperate. We're executing.

The bear case worth acknowledging: Stripe closed Bridge. They now have a vertically integrated stack - Tempo for settlement, Bridge for issuance, Privy for wallets. If Stripe executes well, independent infrastructure providers may find themselves competing against a player with both superior technology and locked-in distribution. Not every company that rejects an acquisition offer ends up vindicated.

But Zerohash is betting neutrality beats integration. Their infrastructure now touches wealth management (Morgan Stanley), payments (Stripe) and payroll (Gusto). That's horizontal platform economics, and they're betting the option value exceeds what Mastercard put on the table.

When infrastructure says no to acquirers, they're betting the market isn't mature yet. They think there's more to capture.

In two years, we will know if $2 billion was cheap or generous.

💸 Superstate Raises $82.5M to Become the Transfer Agent for Tokenized Securities

Three days after NYSE announced plans to build its own tokenization platform, Superstate closed an $82.5 million Series B. This is an interesting timing, and it raises an obvious question: is this validation or competition?

Key Points:

• $82.5 million Series B led by Bain Capital Crypto and Distributed Global, with participation from Haun Ventures, Brevan Howard Digital, Galaxy Digital, Bullish, and existing investors 1kx and ParaFi

• $1.23 billion in tokenized fund assets across two products: USTB (short-duration Treasuries at 0.15% fee) and USCC (crypto carry strategies at 0.75% fee)

• SEC-registered transfer agent status - Superstate records legal ownership onchain in real time, not through wrappers or synthetic structures. When you hold a Superstate-tokenized share, you hold the actual stock certificate

• Galaxy Digital became the first Nasdaq-listed company to tokenize its equity through Superstate's Opening Bell platform in September 2025, with shares now live on Solana

• Direct Issuance Programs launching in 2026 will allow public companies to issue new shares directly to investors onchain with stablecoin settlement

The Tokenized Take:

Let's talk about what Superstate is building, because it matters for understanding the competitive landscape.

There are different types of ownership for tokenized securities. At the top, we have direct issuance where the token itself represents the stock certificate. That's what Superstate does. Move down and you get the traditional brokerage model: legal rights, but your broker holds custody in street name. Further down: SPV wrappers, where you own shares in a fund that owns the stock. At the bottom, derivatives and synthetics offering price exposure with no legal rights at all.

Each step down trades ownership purity for distribution convenience.

Superstate operates at that top tier. As an SEC-registered transfer agent, they're not wrapping securities or creating representations. They're recording actual legal ownership onchain.

NYSE's announcement last week covers the lower tiers. Their platform will support tokens "fungible with traditionally issued securities" - essentially adding blockchain settlement to the existing DTCC infrastructure - while also supporting "natively issued digital securities." They're building a trading venue that's agnostic to ownership models.

So, here’s the question: are these competitors or complementary layers?

NYSE is a trading venue. Superstate is a transfer agent. NYSE can build the exchange where tokenized securities trade, but someone still needs to record who owns what. That's Superstate's moat.

Superstate’s CEO Robert Leshner's thesis goes further. Once shares go live onchain, they become composable - he describes users can borrow against equity positions for a car or house without selling underlying assets. That functionality doesn't exist in NYSE's model, and it's why direct issuance platforms believe they have staying power even as exchanges enter.

Important to note - Superstate isn't alone at this tier. Figure just announced OPEN - a regulated ATS for blockchain-native equities backed by BitGo and Jump. On the Tokenized Podcast last week, CEO Michael Tannenbaum calls it 'marketplace three' after $20 billion in tokenized mortgages. Both platforms are betting that native issuance beats retrofitting DTCC infrastructure. The difference: Figure is building the full stack - issue and trade on OPEN, with liquidity concentrated on their venue. Superstate is focused on the issuance layer, staying agnostic about where securities ultimately trade.

Now, let's have a look at the economics.  Superstate's two tokenized funds manage $1.23 billion in AUM - USTB at $836 million (0.15% fee) and USCC at $423 million (0.75% fee). That's ~$4.5 million in disclosed management fees annually. And then the strategies could even generate yield spreads beyond the stated fees. Even assuming additional revenue from transfer agent services and Opening Bell, this is early-stage economics. The $82.5 million Series B isn't paying for current cash flows. Investors are buying the transfer agent infrastructure before traditional players can build it.

The bull case: tokenized securities hit even 1% of US equity market cap, Superstate captures meaningful share as the regulated transfer agent layer, and revenue scales significantly. The bear case: NYSE's DTCC-compatible model becomes the default, direct issuance stays niche, and traditional transfer agents add tokenization features.

NYSE validated that tokenized securities have a future. Whether that future runs through Superstate's transfer agent infrastructure or gets absorbed into traditional rails. That's the $82.5 million question investors just funded.

🚀 Ledger Plots $4B New York IPO. And Wall Street's Appetite for Crypto Plumbing Gets Tested

BitGo rang the NYSE bell on January 22nd, opening at a ~$2.6 billion valuation. Kraken is targeting $20 billion. Consensys is working with JPMorgan and Goldman Sachs on a mid-2026 listing. And now Ledger (the French hardware wallet maker) is reportedly preparing a New York IPO at $4 billion, a 2.7x jump from its 2023 private round.

The crypto infrastructure IPO window is wide open. Wall Street wants plumbing, not speculation.

Key Points:

• Ledger is targeting a $4 billion NYSE listing. The company is working with Goldman Sachs, Jefferies and Barclays. That valuation represents a 2.7x markup from its $1.5 billion private round in 2023.

• The company has shipped millions of devices and serves 100+ institutional clients. CEO Pascal Gauthier told the FT that 2025 was a record revenue year, reaching "triple-digit millions."

• Timing follows BitGo's clean debut. BitGo's successful listing earlier this month signaled renewed investor appetite for crypto infrastructure plays - giving Ledger a favorable market window.

• Ledger is building US brand visibility ahead of the listing. The company recently signed a multi-year jersey patch sponsorship with the San Antonio Spurs - a strategic play given the Spurs' French fanbase through Victor Wembanyama and Ledger's need for mainstream US exposure before an NYSE debut.

The Tokenized Take:

Ledger sits in the "picks and shovels" category. Custody. Security. Self-sovereignty. This isn't a bet on token prices - it's infrastructure.

The demand driver is simple. More than $3 billion was stolen in crypto hacks in 2025 (according to Chainalysis), a new record for the third consecutive year. That’s why institutional cold storage adoption jumped 50% YoY. When exchanges collapse and hacks increase, hardware wallet demand goes up. Circle's IPO taught the market that stablecoin infrastructure prints money. Ledger is betting the same logic applies to security hardware.

That said, like any company with 10+ years of operating history, Ledger has had its share of challenges (including a 2020 customer database breach that drew criticism). But the IPO thesis doesn't rest on a spotless record. It rests on whether public investors believe security infrastructure is a durable, growing category.

BitGo's successful debut suggests they do. Ledger will be the next test.

But here's what really matters: Wall Street is now underwriting the infrastructure layer of crypto - custody, security, settlement, compliance. The companies going public in 2026 aren't speculative token plays. They're businesses with recurring revenue, institutional clients and models that work regardless of Bitcoin's price.

Ledger won't be the last. The infrastructure pipeline is only getting longer.

Disclosure: Molten Ventures is an investor in Ledger. Shwetabh Sameer of Molten Ventures has recused himself from this story due to this conflict of interest. Molten Ventures has not contributed to this story in any way. This piece was written by other contributors to the Tokenized Newsletter using publicly available information only.

🚀 Mesh Hits $1B Valuation Building the Connective Tissue for Stablecoin Payments

Rain raised $250mil building stablecoin cards. Tempo raised $500mil, its payments chain. Ripple grabbed $500mil at a $40bil valuation for its ecosystem. But who connects these pieces? Mesh just closed $75 million in Series C funding to answer that question - reaching unicorn status and positioning itself as the neutral infrastructure layer that makes all these fragmented systems talk to each other.

Key Points:

• $75mil Series C led by Dragonfly Capital at a $1 billion valuation, with participation from Paradigm, Coinbase Ventures, SBI Investment and Moderne Ventures - bringing total funding past $200 million

• SmartFunding technology enables "any-to-any" payments: consumers pay with Bitcoin, Solana, or any asset they hold; merchants settle instantly in USDC, PYUSD, euros or dollars - no manual conversion required

• Distribution already at scale: MetaMask, Shift4, Revolut and PayPal Ventures partnerships have made Mesh available to 400 million users across 100+ countries, with 300+ wallet and exchange integrations

• Stablecoin-native funding signals conviction: a portion of the Series C settled in stablecoins, following a Series B completed largely in PYUSD - proving their own thesis that this infrastructure handles real capital flows

The Tokenized Take:

Stablecoins hit $300 billion in market cap and processed $27 trillion in 2025. Remarkable growth. But as CEO Bam Azizi put it: "Crypto is crowded by design, with new tokens and protocols emerging every day. That fragmentation creates real friction in the customer payment experience."

Circle launches Arc. Stripe builds Tempo. Phantom issues CASH. Robinhood tokenizes stocks on its own L2. The ecosystem expands and we see more fragmentation.

Mesh is betting that aggregation beats fragmentation. The strategic position differs fundamentally from other unicorns in the space. Rain, Tempo and Ripple are building vertically - owning specific pieces of the stack. Mesh is building horizontally - connecting everyone else's pieces into one network. Dragonfly's Rob Hadick framed it clearly: "Mesh is building the interoperability layer that makes crypto practical at scale... That 'any-to-any' experience is exactly what mainstream adoption demands."

We have been seeing the same trend throughout 2025. M0 raised ~$100 million to solve stablecoin interoperability. Ubyx secured strategic investment from Barclays to build clearing infrastructure across different networks & wallets - solving the 'many-to-many problem' that banks actually understand. What’s the common thread? Interoperability! Hence, it is getting funded because a thousand disconnected stablecoins aren't better than one connected network.

The distribution moat plays a key role for Mesh here. 400 million users reachable through existing partnerships isn't a projection - it's current state. When MetaMask, Revolut and Shift4 are already integrated, the next enterprise customer doesn't build from scratch. They connect once and access the network.

For corporate treasury teams and payment operations executives, the question is: do you want to integrate with each new stablecoin and chain individually, or plug into a single layer that abstracts the complexity? Mesh is betting most will choose the latter.

🏛️ UBS Plans Crypto Trading for Wealthy Clients…Seven Years After Warning of "Total Loss"

UBS, the world's largest private bank with ~$7 trillion in invested assets, is preparing to offer Bitcoin and Ethereum trading to select wealthy clients. The Swiss banking giant will start in Switzerland, with broader geographic expansion likely to follow.

This is the same UBS where Chairman Axel Weber said in 2017: "We have consciously warned against investing in this product because it doesn't hold any intrinsic value and we don't view it as sustainable." At Davos in 2018, he called crypto "speculative, risky, and not an investment we would advise."

So what changed? Not UBS. Their clients.

Key Points:

• UBS is evaluating partners for crypto custody and trading, initially targeting high-net-worth private banking clients in Switzerland with Bitcoin and Ethereum access

• The move follows Morgan Stanley opening crypto investing to ALL wealth clients on October 15, 2025 (including retirement accounts) dropping previous restrictions that required $1.5 million minimums and aggressive risk profiles

• Morgan Stanley is also preparing E-Trade crypto trading for 2026, potentially unlocking ~$1.3 trillion in volume with Bitcoin, Ether, and Solana

• UBS has already experimented with blockchain infrastructure, completing a proof-of-concept for tokenized gold (UBS Key4 Gold) on Ethereum's ZKsync layer-2 and testing institutional payments on Ethereum with Sygnum and PostFinance

• BlackRock's Bitcoin ETF became the fastest-growing ETF in history, accumulating tens of billions in assets in under 18 months and validating institutional demand that wealth managers can no longer ignore

The Tokenized Take:

Remember when banks said "blockchain not Bitcoin"? That held for nearly a decade. UBS built blockchain proofs-of-concept, explored tokenized gold, ran payment pilots - all while telling clients that the underlying assets were too risky to touch.

That distinction is now collapsing.

The driver isn't some newfound conviction about Bitcoin's store-of-value properties. It's competitive pressure and client demand. When Morgan Stanley drops all restrictions and opens crypto to retirement accounts, UBS faces a simple challenge: lose clients or adapt.

Consider UBS's position. They're not just one of the largest wealth managers - they're one of the largest FX brokers globally. If they eventually move toward stablecoin settlement or tokenized FX products, the volume implications are substantial. Today's crypto trading pilot could become tomorrow's infrastructure play.

The Weber quotes matter because they show how institutions actually evolve. Banks don't have epiphanies. They respond to market forces. In 2017, Bitcoin at $5,000 was a speculative curiosity that threatened banking orthodoxy. In 2026, Bitcoin at six figures with tens of billions in ETF flows is a client demand that threatens market share.

Meanwhile, not everyone is moving. JPMorgan's Jamie Dimon has said the bank will let clients buy crypto but still refuses to offer custody - a line in the sand that's looking lonelier by the quarter.

We can see the irony: the institution that warned of "total loss" from crypto now wants to be your crypto broker. Not because they changed their mind. Because their clients did.

For wealth managers still sitting on the sidelines, the window for "first mover" positioning has closed. The question now is whether you're fast enough to avoid being last.

📰 Some More News:

🏦 Tokenization, Stablecoins & Finance

• OKX launches Mastercard-powered card in Europe enabling stablecoin spending at 150M+ locations, with USDC and USDG support through regulated issuer Monavate (Read more here)

• Tether quietly becomes major gold player holding 140 tons of gold worth $23B stored in Swiss nuclear bunker, with gold-backed token growing faster than USDT (Read more here)

• HYPE token surges 30% as Hyperliquid expands beyond crypto perpetuals into tokenized equity indices, stocks and commodities via HIP-3 upgrade (Read more here)

• Coinbase experiments with custom stablecoins backend testing Flipcash's USDF to enable businesses to issue branded dollar-backed tokens collateralized by Circle's USDC (Read more here)

• Circle launches USDCx on privacy blockchain Aleo via xReserve model, marking push by privacy-focused chains to access regulated stablecoins (Read more here)

• Ripple debuts treasury platform following $1B GTreasury acquisition, combining cash and digital asset management capabilities (Read more here)

• DXC connects with Ripple to embed digital asset custody and RLUSD stablecoin into core banking hub at enterprise scale (Read more here)

• Kast introduces stablecoin yield product with KAST Earn Vaults allowing users to generate returns on stablecoin balances (Read more here)

• Theo launches yield-bearing tokenized gold offering exposure to spot gold while generating yield as prices top $5,100 (Read more here)

• PayPal survey finds 40% of US merchants accept crypto with 88% receiving customer inquiries about crypto payments, led by large businesses (Read more here)

• MEXC and Ether.fi launch crypto card compatible with Apple Pay/Google Pay at 150M Visa merchants globally, offering up to 4% cashback (Read more here)

🤑 Funding and M&A

• Galaxy Digital Leads $7M Investment in Tenbin to Build Tokenized Gold and FX Markets (Read more here)

• BitGo debuts with $2.59 billion valuation as crypto IPO window reopens (Read more here)

• Galaxy Digital Leads $7M Investment in Tenbin to Build Tokenized Gold and FX Markets (Read more here)

• River Raises $12 Million To Expand Cross-Chain Stablecoin Infrastructure (Read more here)

• Crypto startup ZBD raises $40 million to power video game payments (Read more here)

💼 Government & Policy

• South Dakota lawmaker revives Bitcoin investment bill allowing state to invest up to 10% of eligible public funds in Bitcoin through multiple exposure options (Read more here)

• Bitget appoints Oliver Stauber as EU CEO to lead Vienna headquarters and MiCA expansion, expects regulatory approval Q2 2026 (Read more here)

• UK finalizes crypto framework after 3-year process with FCA releasing final consultation on 10 regulatory proposals, full implementation by October 2027 (Read more here)

• Japan FSA seeks public input on stablecoin reserve bonds opening consultation on draft rules defining eligible bonds under 2025 law amendments (Read more here)

• UK banks intensify anti-crypto stance with 80% of exchanges seeing more customer transfer blocks in 2025, despite FCA registration (Read more here)

• Korea regulator weighs ownership caps for crypto exchanges pushing to limit major shareholder stakes at 15%-20% (Read more here)

• UK bans Coinbase ads for trivializing crypto risks with ASA ruling satirical video and posters presented complex products as easy response to cost-of-living concerns (Read more here)

• Senator Marshall shelves card fees provision in crypto bill agreeing not to push swipe fee amendment when Senate Agriculture Committee marks up major crypto legislation Feb. 3 (Read more here)

• Arizona advances crypto property tax exemption with Senate Finance Committee moving measures to place November ballot asking voters to exempt virtual currency from taxation (Read more here)

• FCA seeks feedback on further crypto rules as final step in roadmap consultations, proposing Consumer Duty, conduct standards, redress and safeguarding for September 2026 gateway opening (Read more here)

• Trading 212 sold crypto ETNs without FCA authorization allowing UK retail customers to trade products requiring specific regulatory approval until Monday (Read more here)

• Clarity Act support wavers as Polymarket odds fall to 50% from 80% following industry pushback, with Bitwise warning crypto has 3 years to become indispensable if bill fails (Read more here)

• Nomura-backed Laser Digital files for US bank charter with OCC application to operate federally without state-by-state custody licenses, plans spot trading without deposits (Read more here)

• KuCoin taps former LSEG exec Sabina Liu to lead European MiCA expansion from Vienna after securing Austrian CASP license (Read more here)

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