Tether Co-Founder's Upcoming Stablecoin: What We Know

Reeve Collins, a co-founder of Tether, is set to challenge the stablecoin giant he helped build. His upcoming project, Pi Protocol, aims to introduce a more decentralized and yield-bearing alternative to USDT, according to Bloomberg. 

What Is Pi Protocol?

Pi Protocol is a self-proclaimed decentralized stablecoin project that will launch on Ethereum and Solana later this year. Unlike Tether, which monopolizes the minting process, Pi Protocol will allow users to mint their own stablecoins by submitting collateral via smart contracts.

The project introduces two key tokens:

• USP – The main stablecoin

• USI – A yield-bearing token received in exchange for minting USP

Collins describes Pi Protocol as the next evolution of stablecoins, arguing that Tether keeps all the yield generated from its reserves, while Pi will distribute it among users.

How Will Pi Protocol Work?

Pi Protocol will use tokenized real-world assets (RWAs) such as U.S. Treasuries to generate yield for stablecoin holders. This model aligns with emerging competitors like Ethena’s sUSDe ($4.5B supply) and Mountain Protocol’s USDM (5% yield).

The governance structure will revolve around USPi, a governance and yield-bearing NFT. USPi holders will:

• Earn a share of the platform’s revenue

• Vote on key risk parameters and collateral policies

• Influence the protocol’s overall direction

Pi Protocol is launching at a time when stablecoin regulations are tightening, particularly in the U.S. and EU. Last year, Tether had to exit the European market due to MiCA regulations. In the U.S., pending regulatory frameworks could further pressure Tether’s dominance.

Pi Protocol’s compliance-first approach could make it a preferred choice for investors and institutions looking for a transparent, regulated alternative to USDT.

Can Pi Protocol Challenge Tether’s Dominance?

Despite its potential advantages, Pi Protocol faces an uphill battle. Tether remains the largest stablecoin, with:

• $141 billion market cap

• $13 billion net profit in 2024

• Dominance over 63% of the stablecoin market

Moreover, Tether’s deep liquidity and established network effects make it the most traded digital asset in crypto. Even with regulatory challenges, Tether remains the backbone of global crypto trading.

Major financial players, including BlackRock, are betting on programmable dollars as the next phase of financial innovation. The IMF suggests that stablecoins may strengthen the U.S. dollar’s global dominance, rather than challenge it.

Vlad Tenev, CEO of Robinhood, noted that stablecoins must offer yield to compete with traditional banking deposits, which currently earn around 4% in a high-interest environment. This is precisely the gap Pi Protocol seeks to fill.

What’s Next for Pi Protocol?

Pi Protocol’s USP stablecoin will launch on Ethereum and Solana by the second half of 2025. The project’s official website highlights USPi as a governance and yield NFT, but specific details on tokenomics and partnerships remain undisclosed.

Additionally, Pi Protocol is not affiliated with Pi Network, a separate cryptocurrency project. Brand confusion could be a challenge, but Collins’ reputation as a Tether co-founder adds credibility to the initiative.