Major financial firms unite to launch a USD-backed stablecoin with shared reserve profits

A new stablecoin initiative backed by some of the world's most influential financial and crypto companies is taking shape, and it could pose a serious threat to the dominance of the two biggest stablecoins currently on the market — Tether's USDT and Circle's USDC.

The project brings together a coalition of heavyweight players, including payment giants Visa and Mastercard, alongside several prominent cryptocurrency firms. What makes this venture particularly noteworthy is its model for handling reserve earnings — the profits generated from the assets backing the stablecoin would be retained and shared among the participating entities, rather than flowing exclusively to a single issuer.

This approach stands in sharp contrast to the existing structure of USDT and USDC, where the issuing companies — Tether and Circle, respectively — are the primary beneficiaries of the yield generated by the reserves. By distributing these earnings among a broader group of stakeholders, the new consortium aims to create a more attractive and equitable financial model for participants.

Both USDT and USDC currently hold the top positions in the stablecoin market by capitalization, making them essential pillars of the broader crypto ecosystem. Any credible challenger would need not only strong institutional backing but also widespread adoption across exchanges, payment platforms, and DeFi protocols. The involvement of Visa and Mastercard signals that this initiative has the infrastructure and reach to potentially achieve that scale.

Stablecoins have become a critical component of the digital asset landscape, serving as a bridge between traditional finance and decentralized systems. Their importance has only grown as regulators around the world begin drafting clearer frameworks for their use.

If the consortium succeeds in launching and scaling its product, the competitive dynamics of the stablecoin sector could shift significantly. Market observers will be watching closely to see how Tether and Circle respond to this coordinated challenge from some of the most established names in global finance.