Tether and Circle Are ‘Printing Money’ but Competition Is Coming: Wormhole Co-Founder

Core Insights - Stablecoin companies like Tether and Circle are benefiting from high-interest rates while stablecoin holders do not receive any returns [1][2] - Tether reported a net profit of $4.9 billion in Q2, leading to a valuation of approximately $500 billion [2] - There is growing demand for platforms that allow users to share in the yield generated from stablecoins, as current holders are missing out on potential earnings [3][4] Company Strategies - Tether and Circle are not sharing the yields from their stablecoins with users, which could lead to regulatory scrutiny [4] - Circle's acquisition of Hashnote for $1.3 billion aims to facilitate the convertibility between cash and yield-bearing collateral on blockchains [5] - Money market funds are emerging as an alternative for investors seeking yield, but their market capitalization is only around $7.3 billion compared to the global stablecoin market of over $290 billion [5] Market Dynamics - The spokesperson for Tether emphasized that USDT serves as a digital dollar rather than an investment product, particularly benefiting users in emerging markets facing high inflation [6] - Inflation rates in developing countries can reach as high as 50% to 90% year-over-year, with local currencies depreciating against the US dollar by up to 70% year-over-year [6]