Reeve Collins Says Stablecoin Competition Will Shift Toward Yield
The STBL co-founder supports separating payment tokens from yield instruments so ecosystems can share reserve returns while stablecoins remain redeemable at face value.
Stablecoin competition is likely to focus increasingly on how reserve-asset returns are distributed, with payment tokens separated from yield instruments, Tether co-founder Reeve Collins said.
The model proposed by STBL is designed to keep a stablecoin’s value fixed for payments while directing returns from its collateral to the ecosystems that provide capital and distribution. Collins said combining payment and yield functions can reduce a token’s usefulness as money because a $1 token could rise to $1.02 or $1.03 as returns accumulate.
STBL is a token associated with the protocol. USST is its stablecoin, while YLD represents the related yield. Under the proposed structure, users would deposit eligible tokenized assets, including tokenized U.S. Treasurys, into a vault. The protocol would then issue USST and YLD separately.
The collateral would remain visible on-chain, and users could unlock the underlying assets after returning the stablecoin and the associated yield position. Collins said redemption is the foundation of trust because users need to know that the token can be exchanged for its underlying dollar value.
The structure is intended to support ecosystem-specific stablecoins alongside established tokens such as USDT and USDC. Collins described RXUSD as an ecosystem-specific, white-label stablecoin backed by real-world assets. Its success would depend on practical use in trading pairs, settlements, collateral and lending, rather than on deposits made only to earn returns.
Different collateral pools would produce different risk and return profiles. USST would be backed predominantly by U.S. Treasurys, while RXUSD could combine U.S. Treasurys with some credit funds. Collins said higher returns would need to come with clear disclosure of the additional risks.
He expects a market containing a small number of global stablecoins and potentially thousands of tokens built for specific ecosystems and uses. Artificial intelligence agents could eventually select and route transactions among those tokens, reducing the need for users to manually understand each stablecoin or protocol.
Collins also said regulators will need to distinguish payment stablecoins from products designed primarily to generate returns. A token intended to circulate and remain redeemable at face value would serve a different function from a product built to produce yield.
WeFi, which Collins described as an on-chain bank intended to provide financial services globally, would address the distribution side of the broader model. In that framework, stablecoins provide programmable money while on-chain banking infrastructure delivers services to people with limited access to traditional banks.
