BitGo is preparing to launch the USDS Stablecoin, a new financial tool designed to improve liquidity in the stablecoin market. It will reward institutions that support its ecosystem, aiming to make USDS stand out in a market dominated by big players like Tether and Circle.
In a recent announcement, BitGo shared its plan to release USDS in January 2025. Unlike typical stablecoins, USDS will be backed by a mix of short-term Treasury bills, overnight repos, and cash. This backing is meant to ensure the stability and reliability of the new currency.
BitGoās CEO, Mike Belshe, pointed out that while todayās stablecoins serve important roles, there is still space for new ideas. USDS plans to provide a more inclusive and fair model that not only supports the current financial system but also rewards those who help maintain liquidity. In addition, this open-participation approach is expected to encourage more involvement from institutions and could lead to new, creative uses for stablecoins. Belshe also stressedā¦
āA stablecoinās true value comes from the people using it, the liquidity they provide, and the access points for interchange.ā
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Innovative Reward System Sets USDS Apart from Competitors
A key feature of USDS is its reward system, designed to motivate institutions by sharing the returns from the stablecoinās reserves. This sets USDS apart from other stablecoins, which usually donāt offer direct financial rewards for providing liquidity. The returns from the assets backing USDS will be distributed to participants each month.
The reward system is also structured to avoid being classified as an investment contract, which helps USDS navigate the complex crypto regulations that have impacted other yield-bearing digital assets. Instead of direct payouts to users, the focus is on strengthening the ecosystem.
Bitcoin Staking and Cold Storage: BitGo Expands Bitcoin Utility
BitGo is carefully focusing on compliance, aiming to list USDS on all major exchanges with strong regulatory support. The company has set an ambitious goal of reaching $10 billion in assets within a year of launch, setting a new standard for transparency and engagement. Additionally, BitGo is expanding Bitcoin’s utility with its innovative Bitcoin Staking Platform, allowing users to stake BTC directly from secure, multi-sig cold storage wallets that are regulated and insured.
Boosting its global reach, BitGo’s Major Payment Institution License from the Monetary Authority of Singapore allows it to offer fully regulated custody and trade services.
Other stablecoin competitors are also making big moves. Circle recently launched USDC on the Sui network, just a day after announcing plans to enable bridged USDC on Sony’s Ethereum layer 2 blockchain, Soneium.
