Tether and Circle Face Competition as Stablecoin Giants Profit from Treasury Yields: Wormhole Co-Founder

Stablecoin leaders Tether and Circle are generating massive profits from high-interest rate environments while stablecoin holders receive no yield returns, according to Wormhole Co-Founder Dan Reecer at Mercado Bitcoin's DAC 2025 event. Speaking as a panelist, Reecer stated these companies are effectively "printing money" by retaining yields from U.S. Treasuries backing their tokens. Tether reported $4.9 billion in net profit during Q2 2024, with the company's valuation reaching $500 billion in recent funding rounds. Reecer suggested users will eventually demand yield sharing or move funds to competing platforms like M^0 and Agora, which route yields directly to applications and end users rather than issuers. Circle's $1.3 billion acquisition of Hashnote, issuer of tokenized money market fund USYC, aims to enable convertibility between cash and yield-bearing blockchain collateral. Despite money market funds reaching $7.3 billion market cap, they remain a small fraction of the $290 billion global stablecoin market. Tether maintains USDT serves as a digital dollar rather than investment product, emphasizing its role in emerging markets battling high inflation and banking instability.