As the cryptoasset analyst J.P. Koning writes this week, the stablecoin industry faces serious challenges as global central banks transition to negative interest rates. Although rates have been at zero in the Eurozone and negative in Japan for several years, for the first time, other central banks including the Federal Reserve, Bank of England, Bank of Canada and many others are quickly moving towards zero or negative rates. Stablecoin businesses such as Tether and CENTRE derive their profits from the spread between the deposits they receive from customers and the yield they earn from their investments with said deposits. Typically, these investments are in very low-risk assets such as government bonds from G7 countries or in government-insured bank accounts. However, with low-risk bond yields falling precipitously and bank deposit rates fast approaching zero, both on account of monetary policy, these businesses risk losing their entire profit basis. Considering that these companies have non-negligible costs, they risk insolvency if new revenue streams are not sourced. Ultimately, such businesses will either have to introduce new fees, apply negative rates to deposits and effectively charge clients for minting new stablecoin balances or subsidize their operations from other areas, in the hope either that monetary policy eventually reverts to a positive-rate environment or that they can funnel customers into other profitable product offerings.