Tether co-founder Reeve Collins is embarking on an ambitious journey to introduce a decentralized stablecoin that aims to compete with USDT in a market that remains predominantly led by two major players. This initiative promises to reshape the landscape of stablecoins, offering new avenues for growth and investment.
The upcoming stablecoin, USP, is set to debut on both the Ethereum and Solana blockchains in the latter half of 2025, as reported by Bloomberg. The unique aspect of USP lies in its structure; it will utilize smart contracts for minting the stablecoin. Minters of USP will have the opportunity to earn yields through an additional token named USI.
Competing With Tether
USP will be underpinned by yield-bearing real-world assets, including bonds, and will be over-collateralized with stable assets like Treasuries and money-market funds. This backing aims to instil confidence among users regarding the stability and reliability of the new coin.
“We view Pi Protocol as the evolution of stablecoins,” Collins noted in an interview with Bloomberg, drawing a direct comparison to Tether. “Tether has been extremely successful in showcasing demand for stablecoins. But they keep all the yield. We believe 10 years later the market is really ready to evolve.”
Collins, who served as the CEO of Tether from 2013 to 2015, observed significant changes in the market dynamics since he co-founded Tether. Back in 2015, when Tether’s market value was below $1 billion, the situation has drastically transformed, with its current market valuation soaring past $140 billion.
Pi Chief Executive Officer Bundeep Singh Rangar elaborated on the unique approach behind USP, stating, “You want assets that are non-correlated to crypto that are mid- to high yield, low risk.” He emphasized the importance of a robust mechanism to assess asset quality based on their loss ratios and origination.
Regulations are shifting. Yield-bearing stablecoins will be the next trillion-dollar asset class
— Pi Protocol (@piprotocol) February 18, 2025
The regulatory landscape for stablecoins has received renewed attention, especially following the recent executive orders aimed at promoting the adoption of US dollar-pegged stablecoins. Additionally, Congress is working on a comprehensive regulatory framework for the sector, which is anticipated to bolster the legitimacy and trust in such assets.
In parallel, significant players like Coinbase are also gunning for a larger share of the stablecoin market. CEO Brian Armstrong voiced ambitions for USDC to surpass Tether, even as he acknowledged the challenges in achieving this “stretch goal.”
A Crowded Space
As USP prepares for its launch, it enters an intensely competitive market. Tether currently commands a substantial share of approximately 60% with a supply exceeding $141 billion. Circle’s USDC is gaining traction, with a recent supply growth pushing its market share to about 24% and a current valuation of $56 billion.
Trailing behind, the third-largest stablecoin, USDS (formerly known as DAI), holds just under $9 billion in circulation, representing nearly 4% of the market. The competitive dynamics among these players indicate that the upcoming months may witness significant strategies and innovations aimed at capturing user preference in the evolving world of digital assets.
The outlined developments and associated strategies suggest that Collins’ entry into the stablecoin arena could be a pivotal moment in the quest for more diversified, yield-generating stablecoins. As the narrative continues to unfold, stakeholders will closely monitor USD’s impact and its potential ripple effects across the broader cryptocurrency ecosystem.
