Ethena Announces UStb Stablecoin Backed by Blackrock’s BUIDL

As a seasoned analyst with over two decades of experience in the financial markets, I find Ethena’s announcement of UStb intriguing. Having witnessed numerous stablecoins enter and exit the market, it’s refreshing to see an innovative approach like investing reserves in BlackRock’s BUIDL fund.

Today, Ethena unveiled plans for a freshly minted stablecoin named UStb. Instead of parking its resources in traditional savings accounts, it will be investing in BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) as part of its reserve strategy.

Ethena has recently introduced its second stablecoin, following the launch of USDe earlier this year. USDe is a synthetically backed stablecoin whose value is maintained at $1 through an arbitrage strategy known as cash-and-carry trade, which involves balancing an asset with its derivative.

As a data analyst, I’d like to clarify a key point from our recent blog post: Our upcoming product, UStb, will operate as a standalone entity, distinct in terms of risk profile compared to USDe.

In addition, the team stated that UStb aids USDe in handling market risks during turbulent periods by enabling Ethena’s administration to transfer supporting assets to UStb as necessary.

As an analyst, I’ve noticed a growing unease among industry players regarding the US Dollar Coin (USDC), as they argue that despite its safety, the inherent volatility of cryptocurrency markets can lead to a rapid unraveling of trades.

On the topic of X, the team offered insights on several points, explaining that although USDe has maintained its stability in the face of recent bearish trends, it possesses the ability to adapt its backing across various investment options such as basis positions and liquid stable products. Furthermore, they noted that under conditions of low funding rates, USDe might consider integrating UStb for added flexibility.

Ethena announced in their latest post that UStb will become available for trading on established platforms such as Bybit, Bitget, and any additional exchanges they collaborate with in the future. Notably, USDe is currently being employed as margin collateral on these platforms.

More details on UStb will be available in the coming weeks, Ethena said.