The U.S. Federal Reserve's recent decision to cut the federal funds rate by 25 basis points to 4.00%-4.25% on September 18, 2023, poses a challenge to stablecoin issuers like Tether and Circle. These companies have benefited from high interest rates by investing user funds in short-term U.S. Treasury bonds and money market funds, generating significant profits from interest rate differentials. Tether reported a $13 billion profit in Q4 2024, with $7 billion derived from interest on government bonds and repurchase agreements. With the Fed's rate cuts, the profitability of this model is at risk as income from interest differentials is expected to decline. In response, stablecoin issuers are exploring new business models, including expanding into global financial services and diversifying asset management strategies, to sustain their revenue streams amid the changing economic landscape.