At Money20/20 and Dutch Blockchain Week, one word followed me from stage to stage: stablecoins. So when John O’Connor, first hire at the Cardano Foundation and now CEO of RealFi, called in from Nairobi, I wanted the answer to a simple question: what does a second-generation stablecoin actually look like? His reply came with a stat I have not stopped thinking about since. The biggest issuer in the business makes Goldman Sachs profits with a team of about fifty, and it does so by keeping yield that, in his view, belongs to you.
| What you need to know |
|---|
| 1O'Connor splits the stablecoin market in two. V1 issuers such as Tether and Circle keep the T-bill yield on your dollar. V2 issuers hand it back: "almost a democratization of the economics behind the stablecoin industry." |
| 2RealFi's USDr is the liquid dollar stablecoin. Staking it unlocks sUSDr, which accrues yield from real-world fixed income (money market funds, corporate floating-rate bonds, fintech lending) with a target of up to 9% APY. Indicative, and not guaranteed. |
| 3The public testnet is live now. Mainnet follows on Cardano within eight weeks, then Ethereum. Note: RealFi is not available to users in the EU, UK or US. |
| 4My read: one of the sharpest CEOs I have had on this channel. The model stands or falls on two things he does not fully control: regulation, and proving RealFi manages real-world credit risk as well as it explains it. |
Stablecoin V1 kept your yield. V2 hands it back
I opened with the elevator pitch question, because RealFi gets described in a lot of ways and I wanted his version. O’Connor answered with a framework instead of a slogan, and it is the cleanest summary of the stablecoin business I have heard all year. Version one is Tether and Circle, businesses that have issued roughly 150 billion dollars of stablecoins on one elegant trick.
“You give me a dollar, I give you back a digital dollar, USDT or USDC. My business model is taking the real dollar you gave me, investing it, normally in T-bills, and I keep the yields.”
John O’Connor, CEO of RealFi
That trick built empires. It also means the person who supplied the dollar earns nothing on it. Version two, the wave RealFi belongs to, restructures exactly that part. You still get your liquid digital dollar. But a second product, a staking product, routes the returns on the reserve assets back to the holder.
“Rather than that being captured by the issuer, it actually goes back to the person who gave the original dollar. So this is, I would say, almost a democratization of the economics behind the stablecoin industry.”
John O’Connor
You can watch the full conversation here. It runs eighteen minutes and he does not waste one of them:
Interviews like this one land on the Cryptofocus YouTube channel first. Subscribe there if you want them the moment they drop.
‘We’re not trying to compete with Tether’
Everyone who launches a stablecoin gets the same objection: the market is a two-horse race and both horses left years ago. I put it to him directly, banks and PayPal included. Is this market crowded or already saturated? His answer started with respect for the incumbents, and one number that explains the entire industry.
“Maybe around a year ago, there was an article in the FT that Tether made as much profit as Goldman Sachs with about 50 people in its team. In terms of historic business models, this is a pretty great one.”
John O’Connor
The comparison holds up. Tether’s own attestations put its 2024 profit around 13 billion dollars, while Goldman’s net earnings for that year landed just above 14 billion. One of those firms employs tens of thousands of people. O’Connor’s point is not envy, it is strategy: that game is over for new entrants. “This is a scale game, and ultimately it’s a first-mover-advantage game. And this is what Tether achieved. So we’re not looking to try and compete with that business model. We’re trying to innovate on the business model.”
The exception proves his rule. The only recent entrant that made the V1 model work is PayPal, and it cheated in the most legitimate way possible. “They already have their own distribution. The PayPal merchant network and retail network is already huge,” he told me. If you do not own a distribution network of that size, copying Tether is a fantasy. Bringing something structurally new is the only door left, and for smaller players, in his words, “really what we have to do is to go and bring something new to the market and do that job really well.”
Here is that moment from the interview, in under a minute:
Where crypto yield actually comes from
The part of the conversation I would make required viewing sits in the middle. I asked how RealFi holds up when markets are under stress, since liquidity is where stablecoin projects go to die. Instead of a reassurance, I got an autopsy of every DeFi yield collapse of the past cycles. If the yield on a product comes from reflexivity, from incentives paid in a speculative token or from printing more supply, the machine runs only while markets rise.
“With reflexivity, when things turn around and they’re on a downswing, all of this crumbles, because the yields disappeared at the moment actually where you’d like them to be going up, to crowd in additional capital. Or in the absolute worst case, which has been known to happen in crypto, the yield has actually been new entrants into the product, which funds the economics.”
John O’Connor
Read that last sentence again. It describes a Ponzi structure without using the word, and a CEO in the yield business said it on the record. His argument for backing a stablecoin with real-world fixed income is exactly this decorrelation: a crypto redemption wave and a bond market seizure rarely arrive on the same day.
“That’s not necessarily correlated with, let’s say, a AAA investment-grade portfolio of CLO ETFs in the US market, with enormous liquidity, being used by corporates and pension funds all across the world.”
John O’Connor
To be fair to the other side of this trade: real-world assets do not remove risk, they change its shape. Credit risk, redemption timing and liquidity gaps move on-chain along with the bonds, and O’Connor acknowledged as much, listing “liquidity risk, gap risk, all of these other risks” as precisely the things a V2 issuer has to prove it can manage across time. That track record does not exist yet. Building it in public is, in effect, the whole company.
Cardano first, Ethereum next, then wherever demand is
The sequencing raised my eyebrows when I first saw it: launch on Cardano, then Ethereum. Most teams would run that order in reverse and chase the liquidity from day one. The explanation is personal history plus cold math.
“I was the first hire back in the day at the Cardano Foundation, so I’ve got deep experience within that ecosystem. And whilst that ecosystem has a relatively high market cap compared to other blockchain networks, it actually has very few RWA products or DeFi products existing within it. So I consider it relatively greenfield.”
John O’Connor
An underserved chain with a large holder base is a market share opportunity, not a compromise. Ethereum follows because that is where the liquidity and the DeFi plumbing live. He refuses to be tribal about any of it: “We try to think about things a bit more in terms of user experience than carrying a card for a particular blockchain network.” Solana came up in the same breath as a later candidate.
On timing, he was more specific than most CEOs are willing to be on the record. The public testnet, which we covered when it launched, is running its incentivized “Pioneer Season” right now, and the clock on mainnet is short.
“We’ve just launched our testnet. And in the next eight weeks, we’re going to be going to mainnet, originally on Cardano, which is very dear to me and where I’ve been working for a number of years, but then, of course, into the EVM world, where a lot of liquidity and a lot of users currently are.”
John O’Connor
The mechanics, for readers who want the one-paragraph version: USDr is the liquid, non-yield-bearing dollar stablecoin. Stake it and you receive sUSDr, a separate instrument that accrues the returns from a reserve of money market funds, corporate floating-rate bonds and direct fintech lending. RealFi targets up to 9% APY on sUSDr and is explicit that the number is indicative and variable, not a promise.
Yield by the minute is the real pitch
The crypto use case is the beachhead. What O’Connor actually lit up about is the world outside it, and this is where the interview stopped being a product pitch and became a thesis about money. Start with collateral. An institution that posts yield-bearing collateral instead of idle dollars changes its own P&L.
“If the collateral I could put down was yield-bearing, actually a lot of the trades might start to make sense which wouldn’t otherwise. Some losing trades might become winning trades on the margin. And that’s kind of the magic of crypto and what we’re starting to see in DeFi. This isn’t about meme coins or NFTs.”
John O’Connor
Then he went after a business every reader of this site underestimates: remittances. Payment companies sit on enormous dollar flows for hours or days at a time and earn nothing while the money is in transit. “Even a small-scale remittance business might be doing a few hundred million dollars a day in flow,” he pointed out. Neobanks came up too, firms that do the hard work of aggregating customers and then need products to offer them.
“A product that gives you exposure for maybe an hour, or a day, or, in the limit, we’re not there yet, but a minute, and you could get some value accrued for that time period, is really interesting, because traditional financial markets have never worked like that.”
John O’Connor
That sentence is the actual company, if you ask me. A stablecoin is a product; per-minute yield on institutional cash flow is infrastructure. It is also the version of this story that a treasury manager at a payment firm will understand in one reading.
My take
I told him this on air and I will repeat it here. I usually sit down with the CFOs, CTOs and CMOs, because in most projects the CEO had the idea years ago and diffused the details to everyone else. O’Connor holds the whole machine in his head: the reserve composition, the redemption mechanics, the regulatory map, the go-to-market. I have been in this space for about twelve years and I have seen a billion projects come and go. The ones that survive tend to be run by people who can answer the third follow-up question without a lifeline. He answered all of mine.
Two honest caveats before anyone gets carried away. First, regulation decides the ceiling here, and he said so himself: “The regulation will really set what the opportunity scale and what the right strategic approach will look like.” The CLARITY Act in the United States and the evolution of MiCA in Europe, a framework that is already squeezing Tether, will shape what V2 stablecoins are allowed to become. Second, RealFi’s products are currently not available to users in the EU, UK, US and other restricted jurisdictions, which includes most people reading this from the Netherlands. This piece is journalism, not a recommendation, and yield targets like “up to 9% APY” are indicative, never guaranteed.
When I asked where RealFi sits in five years, issuer or infrastructure, he refused to pretend he knows. “They say a week’s a week in crypto. It’s like dog years,” he laughed, before adding the line I will remember this interview by: “No plan survives contact with the enemy.” What he would commit to: “I’m confident that starting as an issuer is the right approach.” John flies to London tonight. In a few months we will sit down again, in person, and measure the roadmap against reality.
Frequently asked questions
What is USDr?
USDr is RealFi’s dollar-pegged stablecoin. It is liquid and non-yield-bearing on its own, comparable in use to USDT or USDC, and launches first on Cardano and then on Ethereum.
How does sUSDr earn yield?
Staking USDr unlocks sUSDr, which accrues returns from a reserve of real-world fixed income: money market funds, corporate floating-rate bonds and direct lending to fintech companies. RealFi targets up to 9% APY. The rate is variable and not guaranteed, and yield-bearing tokens carry real credit and liquidity risk.
When does RealFi launch on mainnet?
The public testnet went live in early July 2026. In this interview, recorded 14 July 2026, O’Connor said mainnet follows “in the next eight weeks”, first on Cardano and shortly after on Ethereum.
Can I use RealFi from the EU?
No. RealFi states that its products are not available to users in the EU, UK, US, Hong Kong and other restricted jurisdictions. European readers can follow the project, but cannot currently onboard.
Want more of these conversations? Watch Arthur Hayes on why AI took crypto’s money, Tom Lee on Ethereum, or follow John at @jjtoconnor and RealFi at @realfi_co. The testnet lives at realfi.co.
