Cryptocurrency custodian BitGo plans to launch a dollar-backed stablecoin next year, offering rewards to liquidity providers.
BitGo is set to launch a dollar-backed stablecoin called USDS in January 2025, making it the first “open-shared stablecoin” on the market. On September 18, BitGo announced the launch of a dollar-backed stablecoin called USDS in January 2025, making it the first “open-shared stablecoin” on the market. mail BitGo said on X that the stablecoin is “fully backed by short-term treasuries, overnight repo operations, and cash, ensuring high liquidity and low risk with real-time proof of reserves.”
BitGo aims to stand out by offering a share of the returns generated from its reserves to liquidity providers, creating a new incentive model in a market currently dominated by Tether (USDT) and Circle’s USD Coin (USDC).
This move comes as BitGo, which He carries Bitcoin, which controls 96.6% of the Bitcoin market cap wrapped in its token wBTC, is facing increasing competition from newcomers like Coinbase. On September 12, Coinbase launched cbBTC, a new ERC20 token backed 1:1 by the Bitcoin held by Coinbase. The token is available on both the Base and Ethereum networks, signaling a direct challenge to BitGo’s market leadership.
Meanwhile, some DeFi protocols are reevaluating their use of wBTC due to concerns about their affiliations with TRON founder Justin Sun. Sky, formerly known as MakerDAO, is now considering whether to remove wBTC as collateral from its SparkLend lending platform due to BitGo’s impending partnership with BitGlobal, which is seen as potentially shifting control of wBTC to a Sun-linked project.