Low interest rates have a negative impact on the profits of stablecoin issuers, but may be positive for business expansion and market penetration. The main profit model of stablecoins relies on interest income from holding reserve assets. In the current environment where the federal funds rate is around 4.25% -4.5%, these issuers can obtain higher returns from reserves. If the benchmark interest rate drops to 1%, the following changes may occur: Decreased income: The issuer's interest income will significantly decrease. Each time the Federal Reserve cuts interest rates by 50 basis points, it may result in a decrease of approximately $625 million in the total annual interest income of stablecoin issuers. If interest rates drop to near zero levels, the profitability of issuers will be significantly weakened, as the return on reserve assets is close to zero. Cost reduction and adoption rate increase: A low interest rate environment will lower the cost of using stablecoins, thereby stimulating more users to adopt them. Including retail and institutional investors, driving the growth of stablecoins in payments, cross-border transfers, and DeFi. Increased risk: higher redemption pressure and potential impact on treasury bond market. Issuers may turn to other sources of income, such as fees or extended services (such as lending platforms), to offset interest losses. Meanwhile, low interest rates may stimulate economic activity and indirectly increase demand for stablecoins.