BitGo to Launch USDS Stablecoin in 2025, Offering Rewards for Liquidity Providers
BitGo has announced plans to launch a dollar-backed stablecoin, named USDS, in January 2025, positioning it as the first “open-participation stablecoin” on the market. According to a September 18 post on X (formerly Twitter), BitGo explained that the stablecoin would be fully collateralized by short-duration Treasury bills, overnight repos, and cash. This ensures the coin will maintain high liquidity and carry minimal risk, with real-time proof of reserves available.
What sets BitGo’s stablecoin apart is its innovative approach to rewarding liquidity providers by offering them a share of the returns generated from the reserves, providing a new incentive model in a space currently dominated by giants like Tether’s USDT and Circle’s USDC.
This development comes as BitGo, which currently commands a 96.6% market share in the Wrapped Bitcoin (wBTC) space, faces mounting competition. Coinbase, for example, introduced cbBTC on September 12, an ERC20 token backed 1:1 by Bitcoin in Coinbase custody, which operates on both the Base and Ethereum networks. This new offering signals a direct challenge to BitGo’s dominance.
In parallel, several decentralized finance (DeFi) protocols are reassessing their reliance on wBTC. Concerns have arisen over BitGo’s potential partnership with BitGlobal, a venture linked to TRON founder Justin Sun. Sky, formerly known as MakerDAO, is considering removing wBTC as collateral on its SparkLend borrowing platform due to fears that this partnership might shift control of wBTC to parties associated with Sun.
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