Tether (USDT) co-founder Reeve Collins says tokenized assets can back stablecoins

While United States dollar-denominated stablecoins dominate the stablecoin and real-world asset (RWA) tokenization game, other competitors are coming into play, according to Collins.

As the dust settles on an eventful year in the crypto sphere, a clear picture of the key trends set to shape the next chapter of Web3 is emerging. Among the noteworthy developments is the potential for stablecoins to be backed by assets other than the United States dollar, as co-founder of Tether, Reeve Collins, has noted.

Speaking exclusively to Cointelegraph on the sidelines of the AIBC Summit in Dubai, Collins, who is also bringing stablecoin yield for users through Pi Protocol, said that apart from currencies, money-market funds, other commodities and gold could back stablecoins in the future.

Collins said that these other assets used to back stablecoins may compete with US dollars by bringing a higher yield to users.

“When you can back it with money market funds, for instance, that generate a higher yield than T-bills and other things like that that are coming onchain, where there’s a lot of yield that will be generated. Those will take precedence,” Collins said.

Collins said these will “start winning” because they bring higher user returns. Furthermore, the executive also said RWA tokenization could play a role in stablecoin backing.

The executive told Cointelegraph that since all types of assets can be tokenized, these can be used to back stablecoins in the future. “You’re going to have a lot of choices other than just dollars,” he added.

However, the Tether co-founder noted that USD-denominated stablecoins are currently dominating the stablecoin and real-world asset (RWA) tokenization game.

His comments come after the World Liberty Financial (WLFI) project, backed by US President Donald Trump, launched its stablecoin on BNB Chain and Ethereum.

The project, which is named after Trump’s campaign slogan, ‘Make America Great Again,’ is set to release its stablecoin, which will be named after the president’s campaign slogan, on both BNB Chain and Ethereum. However, the project said that the tokens were not yet tradable.

According to Collins, the stablecoin entry of a Trump-linked project means that stablecoins are now “fully accepted.” The executive believes everyone will get involved in stablecoins because of the move. This includes institutions, governments and financial technology companies.

“The President of the United States launched a stablecoin. It’s impressive. It lays the foundation for the rest of the world to do it as well,” he said.