Once the Fed starts to cut interest rates, the hottest topics in the crypto world are always the rise and fall expectations of BTC and ETH, yet very few people consider a more direct question: what exactly is your USDT in your Wallet doing?

Many people still have a very basic understanding of stablecoins—thinking that USDT is the true "digital dollar," pegged to cash at a 1:1 ratio, and just holding it can earn interest passively. However, this perception ignores a fundamental fact: the issuing organization is not a charity and must also consider profitability.

When the Fed is in a rate hike cycle, depositing USD in banks and purchasing government bonds can yield considerable returns, allowing issuers to comfortably allocate reserves in low-risk assets. But the rate cuts changed everything. Deposit interest rates began to decline, and government bond yields also shrank. At this time, institutions holding hundreds of billions of USD in reserves face a real dilemma: how to maintain attractiveness in a low-yield environment?

The answer is usually straightforward: shift the original cash and short-term government bonds towards higher-yielding but riskier assets—non-standard debt, related products, and various equity investments. On the surface, it seems fine, but the underlying allocation structure has quietly changed. There is a sufficient time lag and information asymmetry between the audited public data and the actual asset allocation.

More realistically, the credit support for stablecoins mainly relies on periodic audits and multi-national regulation. However, periodic audits themselves have a lag, and regulation is also difficult to track in real-time. As long as the on-paper data looks good, who can ensure that the quality of the underlying assets remains the same? The worse the interest rate environment, the more motivation the issuer has to take this risk.

This is not alarmism, but a realistic assessment of the incentive mechanism. You think you can exchange USDT back to USD at any time, but you may not realize that its supporting assets may have changed beyond recognition.