Tether co-founder Reeve Collins is launching a decentralized stablecoin that will compete with USDT in an increasingly crowded space that is still dominated by two players.

The project will debut a stablecoin called USP on Ethereum and Solana blockchains in the second half of 2025, according to Bloomberg.

Pi will use smart contracts to mint its USP stablecoin and minters will earn yields in the form of another token called USI.

Competing With Tether

The stablecoin will be backed by yield-bearing real-world assets such as bonds and over-collateralized with assets like Treasuries and money-market funds.

“We view Pi Protocol as the evolution of stablecoins,” Collins told Bloomberg before comparing it to Tether.

“Tether has been extremely successful in showcasing demand for stablecoins. But they keep all the yield. We believe 10 years later the market is really ready to evolve.”

Collins, who was CEO from 2013 to 2015, and his partners sold Tether to the operators of the Bitfinex exchange in 2015. Back then, USDT stablecoin’s market value was less than $1 billion, today it is close to record highs of more than $140 billion.

Pi Chief Executive Officer Bundeep Singh Rangar said, “You want assets that are non-correlated to crypto that are mid- to high yield, low risk.”

“We have a mechanism that assesses the quality of the asset. They are ones that are vetted on their loss ratio and origination of where they are coming from,” he added.

Regulations are shifting. Yield-bearing stablecoins will be the next trillion-dollar asset class

Stablecoins got a green light this year with the election of US President Donald Trump. In his first days in office, he signed an executive order promoting US dollar-pegged stablecoin adoption while Congress is working on a regulatory framework for them.

Coinbase CEO Brian Armstrong also wants to chip away at Tether’s market dominance. At the company earnings call last week, he said that the firm aims to make USDC “number one” but admitted that this ambition was a “stretch goal.”

A Crowded Space

USP is entering an extremely competitive stablecoin market that is dominated by Tether which has a share of 60% from a current supply of $141 billion.

Circle’s USDC has seen its supply and market share grow in recent months, and it is currently $56 billion, giving it a market share of 24%.

The third largest stablecoin is USDS, formerly DAI, which has just under $9 billion in circulation and a market share of almost 4%.