BitGo to Launch Yield-Bearing Stablecoin USDS

In 2025, BitGo will introduce a dollar-backed stablecoin, USDS. The custodial platform will offer rewards for providing liquidity to the ecosystem, reports CoinDesk.

USDS will be backed by short-term US Treasury bills, overnight REPO transactions, and cash.

BitGo plans to list USDS on all major exchanges and expects the token’s capitalization to reach $10 billion in 2025.

The company positions the asset as the first stablecoin with open participation.

“The main reason for the launch is to create a more open and fair system that fosters innovation and rewards those who build the network,” commented BitGo CEO Mike Belshe.

USDS will stand out among competitors by offering rewards to institutions providing liquidity to the USDS network, through the distribution of a portion of the income generated from reserves.

“At the end of each month, we generate a certain profit from the cash held in the underlying fund and distribute it to participants on a proportional basis,” Belshe explained.

The publication noted that issuers of similar tokens have excluded the US from available markets due to the potential classification of such a stablecoin as an investment contract.

For this reason, BitGo intends to offer rewards to institutions providing liquidity.

“You either have those who choose only the American market or those who opt for jurisdictions outside the US, such as Mountain Protocol or Lift Dollar from Dubai,” Belshe clarified.

Back in August, BitGo expanded the jurisdictions for storing bitcoin used in Wrapped Bitcoin (WBTC) to Singapore and Hong Kong. This was made possible through a strategic partnership with BiT Global, a firm associated with Tron.

The involvement of Justin Sun in the deal raised certain concerns within parts of the community. MakerDAO participants approved a proposal to halt new loans backed by BitGo-issued Wrapped Bitcoin in WBTC.

On September 12, the cryptocurrency exchange Coinbase launched Coinbase Wrapped BTC (cbBTC) — a wrapped version of bitcoin (1:1) in the form of an ERC20 token.