Key facts:
USDS will be backed by US Treasury bills, overnight repos and cash.
BitGo’s stablecoin will be the “first open-source stablecoin,” according to the platform.
One of the leading custodians of bitcoin (BTC) and cryptocurrencies, BitGo, announced the launch of USDS (USD Standard), a stablecoin that promises rewards to institutions that provide liquidity. This announcement, expected to materialize in January 2025, marks a milestone in the industry, where stablecoins have traditionally been seen as transaction tools with no direct return for users.
Speaking at the Token2049 event in Singapore, BitGo CEO Mike Belshe said: reported that USDS will be backed by US Treasury billsovernight repos and cash, ensuring their stability and value.
At the event it was explained that USDS is their “open participation” model. According to Belshe, the main reason for launching USDS is that while existing stablecoins serve a good purpose, “we see an opportunity to create a more open and fair system that promotes innovation and, more importantly, rewards those who build the network.”
This rewards model is based on the idea that at the end of each month, the returns generated by the underlying cash pool will be returned to participants on a prorated basisdepending on their custody of the asset.
Although this might look like a dividend and classify the transaction as an investment contract, Belshe clarifies that the difference lies in that No revenue is distributed to the end userbut to the institutions that facilitate liquidity.
Now, the launch of USDS is not exempt from regulatory challenges. United States has been excluded from this emerging marketconsidering the legal complexities associated with securities. This is not a new phenomenon; other stablecoins have attempted to reward users, but have had to exclude the United States from their available markets.
BitGo plans to list USDS Coin on major exchanges and targeting USD 10 billion in assets held within the stablecoin by the same time next year.
This goal is faced with a market already dominated by giants like Tether’s USDT and Circle’s USDC. USDT, despite being the most widely used stablecoin, has recently been embroiled in new accusations over the status of its reserves, as reported by CriptoNoticias. On the other hand, USDC has expanded its presence in Brazil and Mexico through local bank transfers, showing the market dynamics and competition that USDS will face.
This article was created using artificial intelligence and edited by a human on the editorial staff.
