Pi Protocol: Tether's Co-Founder Launches Stablecoin Rival Amid US Regulations

Tether Co-Founder to Develop Yield-Bearing Stablecoin Pi Protocol

Reeve Collins, a co-founder of Tether, is set to launch a new stablecoin project called Pi Protocol. The project aims to democratize stablecoin minting and offer yield returns to incentivize new adoption. The impending US stablecoin regulations may provide Pi Protocol with a crucial opportunity to succeed. Its smart contracts will place a high valuation on Treasury bonds, helping it build up reserves to comply where Tether’s USDT has failed.

Pi Protocol will differentiate itself from Tether in several key ways. It will democratize the process of minting stablecoins through smart contracts, allowing users to submit their own collateral and receive yields themselves. This will incentivize users to power the system and keep it healthy. Collins identified a few reasons that make this an ideal moment for Pi Protocol to overtake Tether. Essentially, it all comes down to stablecoin regulations. There’s growing pressure to make a new regulatory framework for these assets in the US, which could change everything for Tether. Late last year, Tether had to exit the EU over MiCA, and US regulations may cause it further pain. For years, Tether has repeatedly refused independent audits of its reserves, and Bitcoin makes up a huge chunk of them. Proposed regulations will demand that stablecoins have transparent reserves and hold a significant chunk of them in Treasury bonds. So, Pi Protocol will hope to overtake Tether in compliance, demanding an over-collateralization ratio that highly values these bonds. The Pi Protocol will accept other forms of collateral than Treasury bonds. The company’s smart contract algorithms will carefully evaluate all submitted forms of collateral, and it will particularly incentivize using Treasuries to mint new tokens.

Several stablecoins tried to out-compete Tether in the EU with Mica, and Pi Protocol will try the same in the US. “The so-called decentralized project is expected to debut on both the Ethereum and Solana blockchains in the second half of this year or sooner. No financial terms were disclosed,” Marty Folb wrote on X (formerly Twitter). Another point of brand recognition may help Pi Protocol in this race. This project is completely unaffiliated with the Pi Network, which is currently one of the most popular projects in the crypto space.

Overall, Pi Protocol has many advantages that may help it eclipse Tether, but