Stablecoin reserve income
Interest earned by a stablecoin issuer on the cash and short-term securities held to back the coins it issues.
Many fiat-backed stablecoins are backed by cash and short-dated government securities. The issuer earns interest on those reserves, while holders generally receive no interest on the token itself. For many issuers, reserve income is the main source of revenue, and it moves with short-term interest rates.
Traders care because a fall in short-term rates lowers issuer earnings unless supply grows enough to offset it. The composition and disclosure of reserves also matter for assessing risk. Check the issuer's reserve report and the mix of assets behind the coins.
Worked example (illustrative numbers, not real data): a stablecoin has 10 billion dollars of reserves earning 4 percent, or 400 million dollars a year. If short-term rates fall and reserves earn 3 percent with supply unchanged, reserve income falls to 300 million dollars.