This article delves into how stablecoins like USDT and USDC generate billions of dollars in revenue by investing their reserves in US Treasury Bills, with their income closely tied to Federal Reserve interest rates. If rates drop to zero, their profitability could plummet. As evidenced by the 2023 Silicon Valley Bank incident, fiat-backed stablecoins face regulatory challenges and depegging risks, while algorithmic stablecoins like USDe rely on crypto-native yields, making them less sensitive...
