Ethena Labs Launches USDtb, Backed by BlackRock’s BUIDL Fund

Ethena Labs officially launched USDtb, a new stablecoin backed by BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), on December 16th.

Developed in partnership with Securitize, USDtb is designed to operate like existing fiat-backed stablecoins such as USDC and USDT, with reserves invested in cash or cash-equivalent assets to maintain a 1:1 value ratio.

USDtb Debuts

According to the official blog post, the stablecoin’s primary reserve asset, BUIDL, makes up 90% of USDtb’s overall backing, positioning it as the highest BUIDL-backed stablecoin to date. USDtb is independent of Ethena’s USDe, thereby providing users with an alternative stablecoin offering a distinct risk profile.

Additionally, USDtb is expected to improve USDe’s resilience in volatile market conditions by potentially serving as a backup asset during periods of negative funding rates. The product has passed extensive audits from leading security firms such as Code4rena, Quantstamp, Cyfrin, and Pashov. It is being considered for inclusion in Spark’s $1 billion Tokenization Grand Prix.

Ethena has tapped Copper, Zodia Custody, Komainu, and Coinbase Institutional to serve as custodians for its newly launched USDtb stablecoin. The token’s liquidity will be supported by major providers, including Jump, Cumberland, Amber Group, GSR Markets, and SCB Limited.

USDtb’s Impact on Ethena’s Stablecoin Ecosystem

José Maria Macedo, co-founder of blockchain research and development firm Delphi Labs, predicts that USDtb will become the largest on-chain tokenized treasury product within a month of its launch. Highlighting the significance for Ethena, Macedo noted that USDtb not only provides a “lower-risk” yield-bearing stablecoin option but also strengthens Ethena’s existing USDe stablecoin.

The exec even went on to say that during periods when funding rates fall below treasury rates, Ethena can close out hedging positions and reallocate assets to USDtb. This approach reduces USDe’s exposure to negative funding rate concerns while ensuring that its floor yield matches the treasury rate.

Meanwhile, Seraphim Czecker, Ethena’s head of growth, spoke about the impact of USDtb on Ethena’s operations, particularly in bearish market conditions. He explained that prolonged periods of negative funding rates no longer pose a threat to Ethena, as the platform can now allocate capital to its own real-world asset-backed stablecoin, USDtb.

This effectively establishes a yield “floor” tied to the T-Bill rate, ensuring a stable APY even in unfavorable market environments. Czecker further highlighted USDtb’s scalability, noting its potential to exceed $100 billion in total value locked (TVL).