Ethena to Launch UStb Stablecoin in Collaboration With BlackRock

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Ethena Labs, a Decentralized Finance (DeFi) protocol, is getting ready to roll out a new stablecoin in collaboration with BlackRock and Securitize. The protocol disclosed that the new stablecoin, UStb, will operate similarly to other stablecoins but with a unique feature. It will invest its reserves in BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) on Ethereum.

This stablecoin comes after Ethena’s first stablecoin, USDe, which was launched earlier this year. This digital asset is a synthetic stablecoin that maintains its $1 value through the cash-and-carry trade strategy.

UStb: A Stablecoin Built on Treasury Bonds and Digital Innovation

The efficacy of BUIDL fund and Securitize’s involvement in supporting UStb lies in their combined strengths in asset management and digital securities. BUIDL fund will provide UStb with backing through tokenized US Treasury bonds.

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This will ensure the stablecoin maintains a strong, reliable value of $1 per token. This makes UStb a secure and low-risk option for investors and traders, particularly useful during periods of market volatility.

Meanwhile, Securitize, a digital securities platform, will play a key role by providing the infrastructure for tokenizing these bonds. The platform will ensure that stablecoin fully complies with regulatory standards and integrates seamlessly into the digital economy.

Securitize has emerged as a significant player in the tokenized investment space, facilitating over $950 million in tokenized assets. It has tokenized funds for Whiteball Capital, Hamilton Lane, BlackRock, and others.

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Compared to other digital assets, this combination allows UStb to operate with enhanced transparency, liquidity, and stability. Additionally, UStb will serve as collateral on centralized exchanges, adding an extra layer of utility in the cryptocurrency space

UStb Set to Boost Stability and Provide Trading Options for USDe

Ethena disclosed that UStb would be a separate product to complement the successful USDe stablecoin. USDe has rapidly become the fifth-largest stablecoin with a substantial market cap of $2.6 billion.

USDe utilizes crypto assets like Ethereum, Solana, and Bitcoin as collateral and employs derivative hedging strategies. It faces risks associated with market volatility and counterparty issues.

The Ethena UStb aims to provide an alternative risk profile, helping to stabilize USDe during adverse market conditions. Additionally, UStb is set to serve as margin collateral on partnered exchanges such as Bybit and Bitget, thereby improving liquidity and expanding user trading options.

Stablecoin, a Bridge Between Traditional Finance and Crypto

Stablecoins have emerged as a critical segment of the cryptocurrency ecosystem. As the market continues to evolve, they provide liquidity and also offer a bridge between traditional finance and digital assets.

Major financial institutions and investment firms are increasingly incorporating stablecoins into their operations. In August, the stablecoin market’s capitalization recorded a new all-time high of $168 billion.