“Stablecoin 2.0”: Reeve Collins wants to redistribute billions of reserves

The reserves that back USDT and USDC brought in over a billion dollars to Tether and several hundred million to Circle in the second quarter. The holders of these tokens received nothing. Reeve Collins, co-founder of Tether, wants to detach this return from the stablecoin: this is what he calls “Stablecoin 2.0”.

Tether had $184.6 billion in USDT in circulation in the second quarter of 2026. Its reserves, notably placed in US Treasury bills, brought it $1.5 billion in net operating profit over the quarter.

Circle took in $667.7 million in reserve revenue over the same period. Or almost 95% of its turnover.

Coinbase, which distributes USDC, collected $324.6 million from Circle in the quarter. The amount of this remuneration depends in particular on the USDC held on the platform.

These revenues accrue exclusively to the issuer. It can then return part of it to its distributors, as is the case between Circle and Coinbase. The holder of the stablecoin keeps a token worth 1 dollar.

An exchange can hold hundreds of millions of dollars of stablecoins and move billions of them for its customers. The income produced by the reserves, however, remains under the control of the issuer.

Reeve Collins believes that the platforms should be able to recover part of it to return it to their customers.

He detailed his vision on September 23 in an interview with Wu Blockchain.

The reserves are visible on-chain and the income they generate is separated from the stablecoin, then distributed according to rules defined in the protocol. This is what Collins calls “Stablecoin 2.0”.

The stablecoin must remain at 1 dollar and retain its function as a means of payment. It thus remains available to be exchanged or repurchased at its target value, while the income from the reserves is distributed separately.

Collins co-founded STBL, which already applies this principle. The same deposit gives rise to two tokens. USST circulates as a stablecoin and YLD carries the collateral yield.

In Europe, Article 50 of MiCA prohibits issuers of electronic money tokens from granting interest on these tokens. In the United States, the GENIUS Act also prohibits the issuer of a stablecoin from paying a return to its holders.

The stablecoin can thus remain the asset used for payments, while another token carries the yield. Collins says he built his model with these rules in mind.

Yield is at the heart of Collins’ thinking about stablecoins. However, this question goes far beyond the issuers. For an investor who holds capital, the question also arises of how this capital can be remunerated.

In DeFi, several mechanisms make it possible to generate yield from stablecoins, without having to bet on the rise or fall of the market.

Stablecoins can be loaned, used to provide liquidity, or integrated into arbitrage strategies.

At the 25% Club, each strategy is studied using the same logic: understanding where the return comes from, who pays for it and what activity generates it.

Stablecoins have put the dollar on rails that run 24 hours a day. Reeve Collins asks the following question: who should capture the income produced by the assets that serve as reserves for these tokens?