Ethena Set to Launch UStb Stablecoin Backed by BlackRock’s Tokenized Fund
Ethena has announced plans to introduce a new stablecoin, UStb, which will be backed by BlackRock's tokenized U.S. Treasuries fund, known as BUIDL.
This initiative comes as Ethena's existing decentralized synthetic dollar, USDe, has rapidly ascended to become the fifth-largest stablecoin, boasting a circulating supply of $2.6 billion.
UStb is designed to operate similarly to conventional stablecoins, with its reserves expected to be invested in BlackRock’s USD Institutional Digital Liquidity Fund, which is tokenized on the Ethereum blockchain.
BlackRock’s BUIDL fund, which has accumulated over $522 million in assets since its launch in March, invests primarily in U.S. dollars, short-term Treasury bills, and repurchase agreements.
Securitize, a platform specializing in real-world asset tokenization, will assist in the launch of UStb. The broader market for tokenized government securities has reached over $2 billion, as reported by asset management firm 21.co.
Distinct from USDe, UStb will serve as a wholly independent product, providing a different risk profile. USDe utilizes derivative hedging strategies that rely on various cryptocurrencies as collateral, creating exposure to market volatility and counterparty risks.
During a recent market downturn, USDe experienced nearly $100 million in redemptions and briefly dipped to $0.997 before stabilizing.
Ethena has indicated that UStb may enhance USDe's resilience during challenging market conditions. The governance of Ethena may decide to reallocate backing assets from USDe to UStb during negative funding periods to mitigate risks.
Additionally, UStb is expected to be utilized as margin collateral on centralized exchanges, such as Bybit and Bitget, with which Ethena has partnered.
In February, Ethena Labs raised $14 million in a strategic funding round, positioning the company at a $300 million valuation.