Ethena Labs Unveils UStb Stablecoin Backed by BlackRock’s Digital Liquidity Fund

• UStb will be fully backed by BlackRock’s BUIDL fund, offering a distinct stablecoin option separate from USDe.
• Ethena’s UStb aims to mitigate USDe risks, with potential backing shifts in negative funding rate environments.
• Ethena plans to integrate UStb with Bybit and Bitget, giving exchanges two stablecoin options for margin collateral.

Ethena Labs has announced the launch of its new UStb stablecoin, a product backed by BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL). In partnership with Securitize, this stablecoin offers a separate product to Ethena’s existing USDe, providing users and exchanges with an alternative option. UStb will serve as an isolated fiat-backed stablecoin with a distinct risk profile from USDe, allowing Ethena to further diversify its offerings in the crypto space.

A Distinct Product with a New Risk Profile

Unlike USDe, which uses derivative hedging strategies for its stability, UStb will be backed by real-world assets. The BUIDL fund, managed by BlackRock, invests in U.S. Treasury bills and other short-term instruments, tokenized on the Ethereum blockchain. 

This marks UStb as a fully collateralized product, distinguishing it from USDe’s reliance on Bitcoin, Ethereum, and other crypto assets. This separate backing gives users a differentiated risk profile, offering more options for investors who may prefer a fiat-backed stablecoin.

Responding to Market Challenges with UStb

One of the key benefits of UStb is its potential to support USDe during challenging market conditions. Over the past six months, despite a bearish environment, USDe has avoided significant issues, maintaining its peg even when faced with $100 million in redemptions. 

However, negative funding rate environments remain a concern. In response, Ethena has noted that if governance deems it necessary, USDe’s backing could dynamically shift towards UStb to mitigate risks during such periods. This flexibility allows Ethena to navigate volatile market conditions while offering increased stability through UStb.

Expanding Exchange Integrations for UStb

Ethena also plans to integrate UStb with centralized exchanges, further diversifying its offerings for margin collateral. Current integrations with Bybit and Bitget allow users to leverage USDe for margin, but UStb will offer a second option. 

This product expansion will allow exchange partners to choose between the two stablecoins, providing more flexibility in their trading strategies. An update on UStb’s timeline and further exchange integrations is expected soon, according to Ethena Labs.