Ethena labs have joined the race to launch stablecoins launching a new stablecoin backed by Blackrock.
The new stablecoin is USDtb and is backed by BlackRock’s USD Institutional Digital Liquidity Fund.
Ethena Labs announced the development via its official Twitter Page, revealing details of the launch and BlackRock’s’ involvement in it.
“Today we are launching our new stablecoin product, USDtb, backed by @BlackRock ‘s BUIDL Fund in partnership with @Securitize
USDtb functions like a traditional stablecoin such as USDC or USDT, utilizing cash and cash-equivalent reserve assets to back each token
Blackrock’s BUIDL represents the vast majority of the USDtb backing, currently the highest BUIDL allocation of any stablecoin in the market”
USDtb
USDtb is a regular stablecoin like other popular coins. It operates similarly to other fiat-backed stablecoins like Tether and Circle’s USDC.
- The major difference between USDtb and other stablecoins is that the former allocates 90% of its reserve to BlackRock’s BUILDL
- This tokenized money market fund primarily invests in short-term U.S. Treasury bills, cash, and repurchase agreements.
- USDtb’s allocation to Blackrock’s BUIDL is the highest allocation of any stablecoin, allowing USDtb to scale more effectively and provide a high degree of stability.
The USDtb stablecoin is being launched in partnership with Securitize, a leader in tokenization of real-world assets.
USDtb has more leverage over the traditional stablecoin option, with a completely separate risk profile compared to Ethena’s flagship token, USDe
Ethena’s Broad Financial Ecosystem
The launch of the USDtb stablecoin is part of a broader strategy to improve the ethena ecosystem and make it more capable of cushioning volatile market conditions.
- While USDe generates yield by shorting assets like Bitcoin Ethereum, and Solana it is susceptible to underperformance during market downturns and negative funding rates.
- To tackle this challenge, Ethena’s Risk Committee has approved USDtb as a backup asset for USDe, allowing the platform to reallocate reserves when necessary.
- USDtb is also expected to serve as an alternative collateral option for margin trading on centralized exchanges, further broadening its utility.
Ethena has partnered with Third-party custodians such as Copper, Zodia Custody, Komainu, and Coinbase Institutional to secure USDtb’s reserves, according to the company’s blog post.
What to Know
- Ethena Labs joins the ranks of Ripple Labs in launching a Stablecoin to improve the utility of its ecosystem. Ripple Labs the parent company of XRP is launching a stablecoin today.
- Stablecoins are crypto assets pegged to the value of Fiat money on a ratio of 1:1. Examples include Tether USDT, Circle USDC, and Paypal’s PYUSD.