In a bold move that could reshape the stablecoin landscape, Reeve Collins, co-founder of Tether, is set to introduce a decentralized stablecoin known as USP. Scheduled for launch in the second half of 2025, USP will operate on the Ethereum and Solana blockchains. This venture comes at a time when the stablecoin market is teeming with competitors yet remains largely dominated by Tether (USDT) and Circle’s USDC, both of which command significant market shares. Collins aims to disrupt this duopoly by leveraging innovative technology and a fresh approach to asset backing.
What distinguishes USP is its underlying mechanism. Unlike many stablecoins that retain yields solely for their creators, USP will integrate smart contracts to mint its currency while offering minters the opportunity to earn yields through a secondary token known as USI. This yield generation will be anchored by real-world assets, primarily focusing on mid- to high-yield options that are deemed low-risk. Collins emphasized the importance of asset quality; USP will be over-collateralized with secure investments such as Treasuries and money-market funds to enhance investor confidence.
Collins has articulated that “we view Pi Protocol as the evolution of stablecoins,” underscoring the growing market appetite for innovative financial solutions. He highlights the success of Tether as a proof point for the sustained demand for stablecoins, yet he critiques the existing structure where yields are absorbed by a select few. By restructuring the yield distribution model, USP aims to foster a more equitable financial ecosystem. Collins’ vision represents a natural evolution in the cryptocurrency sector, suggesting that the market is ripe for alternative models that share gains more broadly among participants.
Despite its promising prospects, USP will enter a saturated market characterized by fierce competition. Tether currently holds around 60% of the market share, equating to over $140 billion in circulation. Circle’s USDC, meanwhile, is on the rise, boasting a supply of $56 billion and claiming a 24% market share. As Brian Armstrong, CEO of Coinbase, openly declared a competitive ambition to make USDC “number one,” it is evident that any new entrant faces substantial challenges. The emergence of USP signifies not only an increase in competition but also a potential shift toward more diversified stablecoin offerings that could benefit consumers through enhanced functionality and yield opportunities.
The introduction of USP by Reeve Collins is an exciting development that could catalyze further innovation in the stablecoin sector. By prioritizing transparent yield generation backed by robust, real-world assets, USP appears poised to capture a share of the market dominated by its predecessors. As regulation and institutional interest evolve, the success of USP will hinge on its ability to demonstrate both reliability and value in a rapidly transforming financial landscape. The next few years will be critical, not just for USP, but for the entire stablecoin ecosystem, as it navigates the complexities of competition, regulatory frameworks, and market demand.