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Tuesday marked the announcement of Reeve Collins, a co-founder of Tether, introducing a new stablecoin venture known as Pi Protocol. Similar to recent market entrants such as Ethena and M^0, Pi Protocol is designed to provide holders with yield, potentially derived from tokenized real-world assets. This differentiates it from earlier stablecoins such as USDT and USDC, which are fiat-backed, and DAI, which is algorithmically pegged to the U.S. dollar.
The new stablecoin protocol is set to debut on the Ethereum and Solana blockchains in the latter half of 2025. While specifics on how the stablecoin will generate yield are not yet disclosed, other tokens have historically passed on revenue from tokenized assets like U.S. Treasuries. For example, Mountain Protocol’s USDM stablecoin, which launched last year, offers an annual yield of approximately 5% from its underlying assets.
Currently, Ethena’s sUSDe stablecoin dominates the yield-bearing synthetic dollar market with a circulation of about $4.5 billion in tokens. It is followed by MakerDAO’s sDAI and BlackRock (NYSE:BLK)’s BUIDL fund, as reported by The Block.
In 2024, Tether reported a substantial $13 billion in net profits from its reserve assets, including government bonds, reverse repurchase agreements, and money market funds. Collins, who led Tether as CEO from 2013 to 2015, was instrumental in the early development and launch of the Tether stablecoin and corporation, alongside Brock Pierce and Craig Sellars. During his tenure, he was pivotal in establishing Tether’s relationship with the Bitfinex crypto exchange and went on to build BLOCKv, an NFT platform that raised $22 million in 2017. Collins also recently sold a gaming startup, Pala Interactive, which raised $70 million, to Boyd Gaming (NYSE:BYD).
As of now, Tether remains a dominant force in the cryptocurrency market, boasting a market capitalization of $141 billion.
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