Tether co-founder Reeve Collins is preparing to launch a new stablecoin that will compete with USDT, according to Bloomberg. The project, called Pi Protocol, aims to offer a decentralized alternative to existing stablecoins by allowing users to earn yield based on real assets.
The new stablecoin, USP, will be issued on the Ethereum and Solana blockchains and is slated for launch in the second half of 2025. Along with USP, a token called USI will be introduced as a reward mechanism for minters participating in the stablecoin's issuance.
How the New Stablecoin Will Work
The announcement highlights that Pi Protocol's key differentiator is its use of yield-bearing real assets — such as bonds and money market funds — to over-collateralize USP. The stablecoin will be overcollateralized, and its value will be managed by smart contracts that monitor liquidity and collateralization levels. Unlike Tether, which retains the yield from its USDT reserves, Pi Protocol plans to distribute that income among liquidity providers.
"Tether has proven there is enormous demand for stablecoins, but it takes all the yield for itself. We believe the market is ready for an evolution," stated Collins.
Aiming for a Share of the Rapidly Growing RWA Market
The launch of this new stablecoin comes amid the rapid growth of the real-world assets (RWA) market on the blockchain, with companies like BlackRock actively working on tokenizing traditional financial instruments.
Additionally, recent US regulatory announcements on stablecoins could attract major players such as PayPal, which previously launched its own stablecoin, PYUSD.
Pi Protocol CEO Bundeep Singh Rangar emphasized that the project focuses on low-risk, income-generating assets like insurance products and bonds.
"We assess asset quality based on their risk and origin to avoid unstable instruments," he explained.
Collins, who previously sold his stake in Tether to Bitfinex operators in 2015 when USDT's market cap was below $1 billion, is now returning with a project that challenges Tether's monopoly on the stablecoin market.
What do you think — does Pi Protocol have a chance to give USDT a run for its money?
Also Read:
- OKX Prepares to Delist USDT in Europe
- Crypto.com to Delist USDT and 9 Other Tokens in Europe — What It Means for Users
- USDC and USDT Killer: Paxos, Robinhood, and Kraken Introduce New Stablecoin
The launch of Pi Protocol coincides with evolving stablecoin regulation in the EU (MiCA), with Crypto.com and OKX already announcing the delisting of USDT in the region, and full support set to end on March 31, 2025.
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