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Pi Protocol

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Reeve Collins, a co-founder of Tether, is set to challenge the stablecoin giant he helped build. His upcoming project,&nbsp;Pi Protocol, aims to introduce a more decentralized and yield-bearing alternative to USDT, according to&nbsp;<a href="https://www.bloomberg.com/news/articles/2025-02-18/tether-co-founder-is-working-on-yield-bearing-stablecoin-rival" rel="noopener noreferrer nofollow">Bloomberg</a>.&nbsp;<h2 id="span-span-strong-what-is-pi-protocol-strong-span-span">What Is Pi Protocol?</h2>Pi Protocol is a&nbsp;self-proclaimed decentralized stablecoin project that will launch on Ethereum and Solana later this year. Unlike Tether, which&nbsp;monopolizes the minting process, Pi Protocol will allow users to&nbsp;mint their own stablecoins by submitting collateral via smart contracts.The project introduces two key tokens:<ul><li>USP – The main stablecoin</li><li>USI – A yield-bearing token received in exchange for minting USP</li></ul>Collins describes Pi Protocol as the&nbsp;next evolution of stablecoins, arguing that Tether keeps all the yield generated from its reserves, while Pi will distribute it among users.<h2 id="span-span-strong-how-will-pi-protocol-work-strong-span-span">How Will Pi Protocol Work?</h2>Pi Protocol will use&nbsp;tokenized real-world assets (RWAs) such as&nbsp;U.S. Treasuries to generate yield for stablecoin holders. This model aligns with emerging competitors like&nbsp;Ethena’s sUSDe ($4.5B supply) and Mountain Protocol’s USDM (5% yield).The governance structure will revolve around&nbsp;USPi, a governance and yield-bearing NFT. USPi holders will:<ul><li>Earn a share of the platform’s revenue</li><li>Vote on key risk parameters and collateral policies</li><li>Influence the protocol’s overall direction</li></ul>Pi Protocol is launching at a time when&nbsp;stablecoin regulations are tightening, particularly in the U.S. and EU. Last year,&nbsp;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&nbsp;preferred choice for investors and institutions looking for a&nbsp;transparent, regulated alternative to USDT.<h2 id="span-span-strong-can-pi-protocol-challenge-tether-s-dominance-strong-span-span">Can Pi Protocol Challenge Tether’s Dominance?</h2>Despite its&nbsp;potential advantages, Pi Protocol faces an uphill battle. Tether remains the largest stablecoin, with:<ul><li>$141 billion market cap</li><li>$13 billion net profit in 2024</li><li>Dominance over 63% of the stablecoin market</li></ul>Moreover, Tether’s&nbsp;deep liquidity and established network effects make it the most traded digital asset in crypto. Even with regulatory challenges, Tether remains the&nbsp;backbone of global crypto trading.Major financial players, including&nbsp;BlackRock, are betting on&nbsp;programmable dollars as the&nbsp;next phase of financial innovation. The&nbsp;IMF suggests that stablecoins may&nbsp;strengthen the U.S. dollar’s global dominance, rather than challenge it.Vlad Tenev, CEO of Robinhood, noted that stablecoins&nbsp;must offer yield to compete with traditional banking deposits, which currently earn around&nbsp;4% in a high-interest environment. This is precisely the gap Pi Protocol seeks to fill.<h2 id="span-span-strong-what-s-next-for-pi-protocol-strong-span-span">What’s Next for Pi Protocol?</h2>Pi Protocol’s&nbsp;USP stablecoin will launch on&nbsp;<a href="https://bsc.news/post/what-is-ethereum-eth-how-it-works-explained" rel="noopener noreferrer nofollow">Ethereum</a> and&nbsp;<a href="https://bsc.news/post/solana-blockchain-ecosystem-deep-dive" rel="noopener noreferrer nofollow">Solana</a>&nbsp;by the second half of 2025. The project’s official website highlights&nbsp;USPi as a governance and yield NFT, but specific details on tokenomics and partnerships remain undisclosed.Additionally, Pi Protocol is&nbsp;not affiliated with&nbsp;<a href="https://bsc.news/post/what-is-pi-network-cryptocurrency-mobile-mining-guide" rel="noopener noreferrer nofollow">Pi Network</a>, a separate cryptocurrency project.&nbsp;Brand confusion could be a challenge, but Collins’ reputation as a&nbsp;Tether co-founder adds credibility to the initiative.

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

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