Second-generation stablecoins create new utility the industry needs
Second-generation stablecoins separate yield from principal, enabling holders to earn returns while keeping liquidity and turning static dollars into productive assets.
Opinion by: Reeve Collins, co-founder of Tether and chairman of STBL
Stablecoins have become the universal backbone of digital markets. Every month, trillions of dollars flow through them. Globally, they clear trades, settle remittances and provide a safe harbor for cash onchain. Yet despite their broad adoption, the original design has barely changed since 2014.
The first generation of stablecoins solved one problem: how to put a reliable digital dollar on the blockchain. Tether USDt (USDT), and later USDC (USDC), delivered precisely that. Simple, fully reserved and redeemable, they gave crypto the stability it needed to grow. But they were also static, like dollars locked in a vault. Holders earned nothing while issuers captured all the yield. That structure fit the market 10 years ago. In 2025, it is no longer enough.