Stablecoin Market Sees New Competitors and Backing Options Emerging

According to Cointelegraph, the dominance of United States dollar-denominated stablecoins in the stablecoin and real-world asset (RWA) tokenization market is being challenged by new competitors. Tether co-founder Reeve Collins, speaking in Dubai, highlighted that while USD-backed stablecoins currently lead the market, other currencies and assets are beginning to emerge as potential backers for stablecoins. Collins emphasized that the stablecoin market helps maintain the dollar's dominance, particularly in the crypto space, where the dollar acts as a reserve currency. However, he noted that other currencies and, more importantly, different types of backing are entering the scene. Collins explained that these alternative assets could offer higher yields to users, potentially competing with US dollars. He mentioned that apart from currencies, stablecoins could be backed by money-market funds, commodities, and gold in the future. These alternatives might generate higher yields than traditional T-bills, making them attractive options for stablecoin backing. Collins believes that these new backing options will start gaining traction due to their potential to provide better returns to users. Additionally, he pointed out that RWA tokenization could significantly influence stablecoin backing, as various assets can be tokenized and used to support stablecoins, offering users more choices beyond just dollars. In a related development, the World Liberty Financial (WLFI) project, supported by U.S. President Donald Trump, launched its stablecoin on BNB Chain and Ethereum in March. Although the tokens are not yet tradable, Collins remarked that the entry of a Trump-backed stablecoin signifies the full acceptance of stablecoins. He believes this move will encourage widespread involvement in stablecoins, attracting institutions, governments, and financial technology companies. Collins expressed that the launch of a stablecoin by the President of the United States is a significant milestone, setting a precedent for global adoption and laying the groundwork for other nations to follow suit.