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We are partnering with real-world asset tokenization platform Securitize to launch a new stablecoin, UStb.
According to a statement shared with The Block, UStb is designed to function in the same way as existing stablecoins and is expected to invest reserves in BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), which is tokenized on Ethereum.
BlackRock’s BUIDL fund invests in U.S. dollars, short-term U.S. Treasury bonds, and repurchase agreements. Since its launch in March of this year, BUIDL has grown rapidly to become the largest tokenized U.S. Treasury bond fund, with over $522 million in assets under management.
According to data compiled by asset management firm 21.co (parent company of Bitcoin exchange-traded fund (ETF) provider 21Shares), the market size for tokenized government securities is now over $2 billion.
Tokenized government securities. Image: Dune.
Securitize facilitates over $950 million in tokenized investments, including tokenizing funds across asset classes with BlackRock, Hamilton Lane, KKR, and more.
Not related to USDe
UStb exists as a “completely standalone product,” the team said, offering an alternative and completely different risk profile compared to Ethena’s existing USDe stablecoin.
USDe, also known as the synthetic dollar, has become the fifth-largest stablecoin by market cap since its launch in February, according to The Block’s USDe price page, with a current circulating supply of $2.6 billion.
USDe differs from existing stablecoins by using derivative hedging strategies instead of direct fiat currency or asset collateral. It uses Ether, Bitcoin, Solana, and other crypto assets as collateral, and maintains the US dollar peg through an arbitrage-based minting and redemption system. It also generates yield through cash and carry strategies.
However, USDe carries risks including exposure to derivatives markets, counterparty risk, and collateral volatility, which may impact peg stability in adverse market conditions.
The stablecoin saw nearly $100 million in redemptions during the August crypto market sell-off stress test, briefly dropping to $0.997 before returning to its $1 target. Ethena Labs also temporarily disabled its frontend last week after a domain registrant account was compromised.
UStb can help USDe weather difficult market conditions, the statement said. “If deemed necessary and appropriate by Ethena’s governance, during periods of negative funding rates, Ethena may close its underlying hedge positions in USDe and reallocate its supporting assets to UStb to further mitigate associated risks,” the team explained.
Ethena also intends to use UStb as an alternative to USDe as margin collateral on centralized exchanges it partners with, including Bybit and Bitget.
In February, Ethena Labs announced that it had raised $14 million in a strategic funding round co-led by Dragonfly and Maelstrom, the family office of BitMEX founder Arthur Hayes, at a valuation of $300 million.
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