Ethena Labs, the developer of the decentralized stablecoin protocol Ethena, is developing a new stablecoin UStb (USTB) backed by major Bitcoin investor BlackRock, Cointelegraph reported.

Ethena Labs officially announced the new project at X on September 26, and UStb will be built in collaboration with BlackRock and digital securities platform Securitize.

The stablecoin will be backed by BlackRock’s tokenized BlackRock USD Institutional Digital Liquidity Fund (BUIDL), with each token having a stable value of $1.

The upcoming UStb will be another fiat stablecoin product in addition to Ethena’s synthetic US dollar stablecoin USDe (USDE) issued in February 2024.

Ethena Labs said UStb will exist as an independent product, providing users and trading partners with different risk configurations than USDe.

In the announcement, Ethena Labs mentioned that the community is increasingly concerned about USDe’s response in a negative funding rate environment. Despite the market downturn in the past six months, USDe has not experienced a week of negative funding.

Ethena Labs believes that the addition of UStb can help solve this problem for USDe. USDe's support components can be dynamically adjusted in different interest rate environments and benefit from UStb during periods of weak funding conditions.