Ethena Labs, developer of the decentralized stablecoin protocol Ethena, is working on a new stablecoin backed by a tokenized fund from BlackRock.
Ethena Labs took to X on Sept. 26 to announce its new stablecoin project, UStb (USTB), which will be built in partnership with major Bitcoin investor (BTC) BlackRock and the digital securities platform Securitize.
The stablecoin will be backed by BlackRock’s tokenized BlackRock USD Institutional Digital Liquidity Fund (BUIDL), which offers a stable value of $1 per token.
The UStb announcement by Ethena Labs. Source: Ethena Labs
The upcoming UStb stablecoin will be a separate fiat stablecoin product alongside USDe (USDE), a synthetic dollar stablecoin issued by Ethena in February.
“This will exist as an isolated product separate from USDe offering users and exchange partners a new product with a differentiated risk profile to USDe,” Ethena Labs said.
USDe can benefit from UStb during periods of weak funding conditions
In the announcement, Ethena Labs mentioned that the community has been increasingly concerned about the USDe response to negative funding rate environments.
“Despite bearish conditions over the last six months, Ethena’s USDe has not endured a single week of negative funding,” Ethena Labs noted. According to the developer, the addition of UStb could help resolve this issue of USDe. Ethena Labs wrote:
“Nevertheless, if required USDe backing composition can dynamically adjust between basis positions and liquid stable products in different interest rate environments and USDe can benefit from incorporating UStb during periods of weak funding conditions.”
The post added that Ethena could potentially close hedging positions and re-allocate backing assets to UStb if governance deems it necessary and appropriate in negative funding conditions. Ethena Labs added that such a move is expected to further facilitate risk associated with negative funding rate environments.
Ethena to integrate collateral offerings beyond Bybit and Bitget
Additionally, Ethena Labs mentioned its expansion into collateral offerings on centralized exchanges beyond existing integrations with exchanges like Bybit and Bitget.
“It can offer exchange partners the choice of two distinct products for margin collateral,” the post said.
Ethena Labs promised to provide an update on new exchange integrations as well as UStb timelines shortly.
Related: Goldman Sachs-backed BitGo introduces USDS rewarding stablecoin
Cointelegraph approached Ethena Labs for a comment regarding the UStb launch but did not receive a response at the time of publication. This article will be updated pending new information.
Since launching last year, Ethena’s USDE has established itself as a major emerging stablecoin, with its market value surging past $2 billion in April, according to CoinGecko data.
USDe (USDE) market capitalization chart. Source: CoinGecko
USDE’s market capitalization is comparable with that of First Digital (FDUSD), a stablecoin issued by FD121, a subsidiary of Hong Kong-headquartered financial firm First Digital.
At the time of writing, USDE’s market cap amounts to $2.6 billion, slightly lower than FDUSD’s $2.9 billion.
Top seven stablecoins by market capitalization. Source. CoinGecko
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