Tether Co-Founder Launches a Rival Yield-Bearing Stablecoin Backed by RWA

• Pi Protocol introduces USP stablecoin backed by bonds and assets.
• Tether’s co-founder Reeve Collins targets the yield-bearing crypto market.
• USP stablecoin will launch on Ethereum and Solana blockchains.

Reeve Collins, the co-founder of Tether, is launching a new decentralized stablecoin called USP. The stablecoin will provide users with the opportunity to earn yield, backed by bonds and other real-world assets. This move aims to introduce competition in the stablecoin market, which is currently dominated by Tether’s USDt, which was co-founded by Collins in 2014.

Pi Protocol and the Launch of USP

Collins is heading Pi Protocol, a decentralized platform set to launch on Ethereum and Solana blockchains later this year. 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 backed by real-world assets like bonds, although the exact fiat backing remains unclear.

The USP stablecoin will be pegged to the US dollar, although there are no specific details about the fiat currencies it represents. Pi Protocol is designed to allow decentralized minting of its stablecoin through smart contracts which positions it as a competitor among market leaders. The platform aims to offer users a chance to earn yield and attract investors looking to earn interest on their assets.

Tether co-founder Reeve Collins launches

The development of USP comes at a time when the stablecoin market is becoming more competitive and Tether is facing increased 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.

Pi Protocol and the Launch of USP

Stablecoins 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.