New stablecoin is coming from BitGo

-

BitGo announced the plans to launch a new dollar-backed stablecoin called USDS next year, offering rewards to institutions that provide liquidity.

The announcement was made during Token2049 conference in Singapore, where the crypto custody firm revealed its strategy for this new stablecoin.

Unique features of USDS, not your average stablecoin

The USDS stablecoin will be backed by short-term Treasury bills, overnight repos, and cash, similar to other stablecoins available today.

But for unique positioning, BitGo describes USDS as the first open-participation stablecoin.

BitGo CEO Mike Belshe shared that the main goal of launching USDS is to create a more open and fair system that encourages innovation and rewards those who contribute to the network.

“A stablecoin’s true value comes from the people using it, the liquidity they provide, and the access points for interchange.”

Stablecoin market is a big sector within the crypto industry

Stablecoins are cryptocurrencies whose values are tied to traditional assets like fiat currencies or gold, helping to stabilize their prices.

They play a quite important role in crypto trading and provide much of the liquidity in DeFi.

Tether’s USDT token dominates the market with a cap of about $119 billion, while Circle’s USDC, the second biggest stablecoin is significantly smaller.

BitGo’s approach with USDS will differ from its competitors by distributing a portion of the returns generated from its reserves back to institutions providing liquidity.

Belshe explained that at the end of each month, BitGo will share returns based on how much liquidity each institution contributes.

While this model might seem similar to yield, to dividend payments, Belshe clarified that it isn’t distributing proceeds to end-users but rather to institutions that support the liquidity of USDS.

U.S. stablecoin market is challenging

Other stablecoins already attempted to create yield-bearing options for users but often faced challenges in the U.S. market due to regulatory issues.

Belshe told that many projects have had to choose between targeting U.S. or non-U.S. markets, simply because of these complications.

BitGo wants to avoid these pitfalls by ensuring compliance while still offering attractive incentives for liquidity providers.

With plans to list USDS on all major exchanges and a target of $10 billion in assets held within the stablecoin by next year, BitGo’s entry into the stablecoin market could cause serious consequences.

USDS might encourage other companies to explore similar reward-based models, and eventually this could be a trend, potentially reshaping the stablecoin sector.

Have you read it yet? Bitstamp says Ethereum ETFs would have performed better if launched with the Bitcoin ETFs

LATEST POSTS

Nigerian Court Orders Arrest of CBEX Promoters in ₦1 Billion Crypto Fraud Case

A Federal High Court in Abuja approved the Economic and Financial Crimes Commission’s (EFCC) request to arrest six individuals involved with Crypto Bridge Exchange (CBEX)....

Bitcoin whales feast while retail panics

You ever get the feeling you’re watching a rerun, but the stakes just keep getting higher? That’s Bitcoin right now. The exchanges are looking more...

Dubai + December = Binance Blockchain Week

The city’s already dripping with gold and ambition, but now, the world’s crypto bosses are rolling back into town. The Binance Blockchain Week is making...

Trump’s meme token skyrockets 70% after VIP dinner invite

The $TRUMP token just pulled a stunt that sent its price jumping over 70%. Why? Because the former president’s throwing a fancy gala dinner for...

Most Popular

Guest posts