New USP Stablecoin to Offer Yield Backed by Bonds and Real-World Assets
Tether Co-Founder Introduces Rival Stablecoin with Yield-Bearing Features
Tether co-founder Reeve Collins is launching a decentralized stablecoin designed to compete with the USD-pegged token he originally helped develop. This move intensifies the competition in the stablecoin market, which has seen rapid growth and innovation.
According to a Bloomberg report dated Feb. 18, Collins now serves as the chairman of Pi Protocol, a decentralized project set to launch later this year on the Ethereum and Solana blockchains.
Pi Protocol will utilize smart contracts to facilitate the minting of its USP stablecoin in exchange for USI tokens, which generate yield. The USP stablecoin will be backed by bonds and other real-world assets (RWAs), offering investors an opportunity to earn passive income through decentralized finance (DeFi).
Although USP suggests a peg to the US dollar, details regarding its underlying fiat reserves or supported currencies have yet to be disclosed.
Collins’ History with Tether and Stablecoin Evolution
Collins was one of the original developers behind Tether (USDt) in 2014, before the project was sold to the operators of crypto exchange Bitfinex in 2015. Since then, Tether’s market value has skyrocketed from under $1 billion to $142 billion, making it the dominant force in the stablecoin sector.
Prior to unveiling Pi Protocol, Collins hinted at the development of a yield-bearing stablecoin, emphasizing that assets generating returns could attract more investors seeking passive income on fiat-pegged digital tokens.
Rising Competition in the Stablecoin Market
Pi Protocol enters an already highly competitive stablecoin industry, currently dominated by Tether (USDt) and other key players, including Circle’s USD Coin (USDC), Ethena’s USDe, and Dai (DAI).
According to DeFiLlama, the total stablecoin supply has surpassed $225 billion, with USDC experiencing rapid growth, outpacing Tether’s expansion earlier this year. Meanwhile, Ethena’s USDe has overtaken DAI to become the third-largest stablecoin by market capitalization.
Stablecoins: A Critical Component of the Crypto Ecosystem
Stablecoins play a fundamental role in the cryptocurrency market by providing liquidity and enabling seamless digital asset transactions. They have also gained traction in cross-border remittances, offering a cost-effective and efficient alternative for international money transfers.
A recent ARK Invest report highlighted the growing importance of stablecoins, revealing that stablecoin transactions in 2024 reached $15.6 trillion, surpassing both Visa and Mastercard in transaction volume.
As the stablecoin market continues to evolve, the emergence of yield-bearing assets like USP signals a shift towards more advanced financial products within the crypto space.
