BitGo to Launch USDS Stablecoin with Unique Rewards for Institutions in 2025

TL;DR

- BitGo plans to launch its new stablecoin, USDS, in January 2025, aiming to reward institutions that provide liquidity.

- Backed by short-duration Treasury bills and cash, USDS seeks to establish an open-participation model in the competitive stablecoin market.

BitGo is preparing to introduce its stablecoin, USDS, in January 2025, as announced at the Token2049 event in Singapore. This initiative aims to differentiate itself in the crowded stablecoin landscape by offering rewards to institutions that contribute liquidity. CEO Mike Belshe highlighted that USDS will be backed by short-duration Treasury bills, overnight repos, and cash, promoting an innovative, open-participation model.

Belshe emphasized that the value of a stablecoin is determined by its users and the liquidity they provide. With the stablecoin market largely dominated by Tether's $USDT and Circle's $USDC, BitGo's USDS aims to stand out through its unique rewards-based system. At the end of each month, returns generated from held cash will be distributed to liquidity providers based on their asset custody.

While there may be concerns about the distribution resembling dividends, Belshe reassured that these rewards are intended for institutions, not end users. Many other stablecoins have attempted yield-bearing options for users but have faced regulatory hurdles, especially in the U.S. market. This has led to some projects operating outside the U.S. due to security classifications.

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