Ethena Labs, operating in the decentralized finance industry, has recently released its latest product. The fiat-backed stable coin is known as the UStb.
We are excited to announce Ethena's newest product offering: UStbUStb will be fully backed by @Blackrock BUIDL in partnership with @Securitize, enabling a separate fiat stablecoin product alongside USDeDetails below on why this is important: pic.twitter.com/jOIoMef7W3
— Ethena Labs (@ethena_labs) September 26, 2024
The news is posted on the official Ethena Labs Twitter Page, indicates that UStb will be fully backed by BlackRock’s BUIDL, which is a tokenized U.S Treasuries fund, with over $522 million in assets under management and powered by Securitize.
Key Features of UStb
Ethena’s existing dollar, USDe, has become 5th largest stablecoin, with a $2.6 billion circulating supply. UStb is designed to function in the same way as traditional stablecoins.
The Ethena team said ‘UStb would exist as a “wholly independent product,” offering an alternative and completely different risk profile compared to Ethena’s existing USDe stablecoin’ the team further included “If deemed necessary and appropriate by Ethena’s governance, during periods of negative funding rates Ethena will be able to close the hedging positions underlying USDe and re-allocate its backing assets to UStb to ameliorate related risks further.”
Ethena Labs’s new fiat stablecoin will compete with established fiat stablecoins such as USDC and Tether (USDT), which also use fiat collateral. However, the main strength of this new token is its links with BlackRock and Securitize, which is a rather reputable company in the financial world, so people trust it.
The Role of BlackRock and Securitize
The support of BlackRock is a strong foundation for the stablecoin UStb. The BUIDL-tokenised US Treasury fund is perhaps the most liquid and secure investment available. BUIDL ensures that Ethena Labs invests UStb reserves into US Treasuries through BUIDL, which will enable UDtb to be one of the safest and most liquid assets globally.
Securitize’s involvement in the launch of UStb suggests that the combination of traditional finance with blockchain is gaining more popularity. Another reason for Ethena’s cooperation with regulated digital securities like Securitize is also valuable for the company because it can minimize the infringement of legal standards for asset tokenization.
The Future
This is a significant step towards the integration of the traditional financial sector with the digital asset industry. As we have already seen, the stablecoin market is highly saturated. However, UStb has a competitive advantage in this space since it is backed by BlackRock and powered by Securitize.
Therefore, the launch of this new token means Ethena Labs is ready to take tokenized finance to the next level while offering a secure and fairly valued asset to its users across the globe. The partnership with BlackRock and Securitize shows that they are mentally preparing to bring credibility, security, and innovation to the increasingly popular space of decentralized finance.