Ethena Announces New Stablecoin Backed by BlackRock Tokenized Assets

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Ethena Announces New Stablecoin Backed by BlackRock Tokenized Assets
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Ethena, in partnership with real-asset tokenization firm Securitize, is set to launch a new stablecoin called UStb. The announcement brings a new perspective to the stablecoin market. After all, UStb will be backed by reserves invested in BlackRock’s Digital Liquidity Fund (BUIDL), which is tokenized on the Ethereum blockchain.

BlackRock’s BUIDL fund invests in U.S. dollars, short-term U.S. Treasuries, and repurchase agreements. Since its launch in March 2023, it has reached over $522 million in assets under management.

Ethena aims to differentiate UStb from traditional stablecoins by associating its reserves with a fund managed by one of the largest asset managers in the world, BlackRock. In practice, this reinforces the security and transparency of the project.

Additionally, the partnership with Securitize also allows the stablecoin to benefit from the company’s expertise in asset tokenization, expanding the reach of tokenized investments, which currently exceed $950 million in tokenized funds for companies such as BlackRock, Hamilton Lane and KKR.

Ethena plans to launch new stablecoin

One of the main differentiators of UStb is that it will be a completely independent product from USDe, another stablecoin from Ethena. While USDe uses derivatives hedging strategies and crypto assets such as Bitcoin, Ether and Solana as collateral, UStb will present a distinct risk profile, being directly backed by real and safe assets, such as US Treasuries.

Launched in February 2023, USDe has established itself as the fifth-largest stablecoin on the market, with a circulating supply of $2.6 billion. However, its derivatives-based collateralization strategy exposes USDe to volatility risks and potential disruptions in adverse market conditions. Proof of this is that during a recent crypto market crash, USDe suffered a slight detachment from its peg to the dollar, falling to $0.997 before recovering.

The introduction of UStb is a way to protect USDe in times of turbulence. The team said that, if necessary, it may reallocate assets from USDe to UStb during periods of negative funding rates. The aim is to mitigate risks related to market volatility.

Additionally, Ethena intends to use UStb as collateral on centralized exchanges it has partnered with, such as Bybit and Bitget, providing users with a safer alternative to USDe. The new stablecoin is expected to expand diversification options for investors and bring more stability to the crypto ecosystem.

Ethena, which raised $14 million in a strategic funding round in February 2023, continues to expand its market presence while maintaining its commitment to innovation and security in its stablecoin solutions.

Ethena Announces New Stablecoin Backed by BlackRock Tokenized Assets

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Ethena Announces New Stablecoin Backed by BlackRock Tokenized Assets

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Ethena Announces New Stablecoin Backed by BlackRock Tokenized Assets

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