Tether Co-Founder Sees Growing Competition to US Dollar in Stablecoin Market

Tether co-founder Reeve Collins has highlighted that the US dollar's dominance in the stablecoin market is facing growing competition. Speaking in Dubai, Collins noted that while USD-backed stablecoins currently dominate, other currencies and assets are emerging as potential backers for stablecoins. He emphasized that the stablecoin market is evolving, with new types of backing, such as money-market funds, commodities, and gold, offering higher yields and potentially challenging the US dollar's supremacy.

Collins, who is involved in bringing stablecoin yield to users through Pi Protocol, suggested that the diversification of backing assets could lead to a more competitive stablecoin landscape. He mentioned that tokenized assets, including real-world assets (RWAs), could also play a significant role in backing stablecoins. This shift could provide users with more choices beyond just the US dollar, potentially altering the dynamics of the stablecoin market.

Collins' comments come at a time when the stablecoin market is experiencing significant growth and regulatory scrutiny. The entry of high-profile projects, such as the World Liberty Financial (WLFI) project backed by former US President Donald Trump, signals the increasing acceptance and adoption of stablecoins. Collins believes that this move will encourage more institutions, governments, and financial technology companies to engage with stablecoins, further driving competition in the market.

The co-founder of Tether also noted that the regulatory landscape for stablecoins is evolving rapidly. While Tether has faced regulatory challenges, including scrutiny over its reserve practices, other stablecoins like USDC have positioned themselves as compliant and transparent alternatives. This regulatory alignment has positioned USDC as a preferred stablecoin for businesses and fintech platforms that prioritize transparency and long-term stability.

As the stablecoin market continues to grow, the competition between USDT and USDC is likely to intensify. Traders and institutions will need to weigh the benefits of high liquidity and global trading access offered by USDT against the transparency, regulatory compliance, and long-term trust provided by USDC. The future of stablecoins will be shaped by how these players adapt to new regulations and user demands, ultimately determining the dominance of the US dollar in the stablecoin ecosystem.