This article explores the profitability of stablecoins, particularly focusing on Tether's success and the limitations of its business model. It outlines three monetisation strategies: issuance, flow, and payment acceptance, concluding that payment acceptance offers the best long-term potential for sustainable growth in the stablecoin market.

Tether CEO Paulo Ardoino and Circle CEO Jeremy Allaire expressed their readiness to comply with the newly signed GENIUS Act, which connects stablecoins to the U.S. financial system. Ardoino outlined Tether's plans to adjust its operations to meet new auditing standards and develop a U.S.-centric stablecoin aimed at institutional users, while Allaire emphasized Circle's commitment to transparency and trust in response to the evolving regulatory landscape.

Tether will discontinue its USDT stablecoin services on five legacy blockchains: Algorand, Bitcoin Cash, EOS, Kusama, and Omni. The decision aims to refocus on platforms that support greater scalability and community engagement, with redemptions ending on September 1, 2025. This move comes in light of regulatory pressures and a decline in usage for these legacy chains.

Tether's launch of the USAT stablecoin aims to establish a compliant presence in the U.S. market, posing a direct threat to Circle's USDC. The move emphasizes a shift towards regulatory compliance in stablecoins, raising concerns over privacy versus oversight in the crypto space.

Tether's USDT has reached a record market cap of over $160 billion, marking significant growth due to its utility in emerging markets and strong profits from U.S. Treasury holdings. CEO Paolo Ardoino highlighted this milestone as a testament to USDT's role as a digital dollar for millions worldwide. Tether's dominance continues, holding a substantial market share in the stablecoin sector.

Tether and Circle are profiting from high-interest rates while stablecoin holders receive no returns, leading to a growing demand for yield-sharing options. New platforms like M^0 and Agora are emerging to allow stablecoin infrastructure that routes yield to users, highlighting a shift in the stablecoin market towards real-world applications. As competition increases, traditional stablecoin issuers may face pressure to adapt or risk losing users to alternatives.

Tether's CEO Paolo Ardoino announced that the company is progressing towards entering the U.S. institutional stablecoin market, following the recent signing of the GENIUS Act to regulate stablecoins. Ardoino indicated that an announcement regarding their strategy for U.S. markets is expected in the coming months, while also addressing the competitive landscape with traditional banks.

South Korea's major banks, including Shinhan, Hana, KB Financial, and Woori Bank, are set to meet with Tether and Circle to discuss potential partnerships in stablecoin distribution and the issuance of a won-pegged stablecoin. These meetings are part of President Lee Jae Myung's initiative to establish a stablecoin market in the country following his election campaign promises.

JPMorgan analysts warn that Circle's USDC stablecoin faces increasing competition from Tether's upcoming USAT, Hyperliquid's USDH, and various fintech stablecoins. As the stablecoin market approaches new U.S. legislation, the analysts suggest that this rivalry may lead to a "zero-sum game" with issuers mainly vying for market share unless the overall crypto market expands significantly.