Tether Co-Founder Reeve Collins Launches Yield-Bearing Stablecoin USP, Attempting to Challenge Dominant Players

The stablecoin will reportedly be backed by bonds and other real-world assets.

Reeve Collins, the co-founder of Tether (USDT), is launching a new decentralized stablecoin called USP. The stablecoin will allow users to earn yield, and it will reportedly be backed by bonds and other real-world assets.

Collins is now the CEO of Pi Protocol, a decentralized stablecoin protocol launching on the Ethereum and Solana blockchains later this year. According to a recent report, the platform will use smart contracts to allow users to mint the USP stablecoin in exchange for the yield-bearing USI token. The USP stablecoin will be pegged to the US dollar and backed by real-world assets.

The report adds that Pi Protocol will allow decentralized minting of its stablecoin via smart contracts, positioning it as a competitor among the market leaders. The platform aims to offer users a chance to earn yield and attract investors looking to earn interest on their assets.

The development of USP comes as the stablecoin market gets more competitive and Tether faces increasing challenges. Pi Protocol will join other major players like Circle’s USDC, Ethena’s USDe, and Dai. These stablecoins have gained increased importance and hold over $225 billion in circulation, according to DefiLlama.

Tether’s USDt, which started with less than $1 billion in market value, now sits at $142 billion. However, USDC has been growing faster than USDT this year, while Ethena’s USDe overtook DAI to become the third-largest stablecoin by market capitalization. Stablecoins remain essential in the cryptocurrency ecosystem to provide liquidity and enhance transaction capacity for buying and selling digital assets.

Stablecoins also continue to grow in importance, especially in cross-border transactions. They provide a cheaper, more efficient alternative to traditional payment systems like Visa and Mastercard. A recent ARK Invest report showed that stablecoin transactions reached $15.6 trillion in 2024, surpassing traditional payment networks.

The launch of USP could significantly shift the dynamics within the stablecoin market. The growing demand for yield-bearing tokens, will attract new investors to Pi Protocol’s stablecoin. Although Tether remains the dominant player, there is increased competition, and the future of stablecoins looks poised for further innovation.