BlackRock and Securitize back Ethena’s new stablecoin 

Ethena Labs is launching a new stablecoin project fully backed by BlackRock’s Ethereum-based tokenized fund and Securitize.

Synthetic dollar issuer Ethena (ENA) has introduced its UStb fiat stablecoin product, backed by the BlackRock USD Institutional Digital Liquidity Fund, known as BUIDL, and private markets lender Securitize. UStb is designed to operate in the same way as a traditional stablecoin, with BlackRock and fund distributor Securitize managing the collateral for the new fiat-pegged offering.

Ethena’s September 26 announcement of UStb indicated that community concerns about the protocol’s existing stablecoin, Ethena USDe (USDE), spurred the creation of the BlackRock-backed asset.

Concerns have emerged over how USDe would respond to negative funding rate situations, with figures like Fantom developer Andre Cronje likening the asset to the bankrupt TerraUSD and questioning systemic risks.

Despite bearish market conditions that typically result in negative funding, Ethena noted that having traded USD for over six months, these fears have never materialized. According to the team’s statement on X, the introduction of UStb provides another cushion against perceived risks in the event of lower funding rates.

If management deems it necessary and appropriate in negative funding conditions, Ethena may close hedge positions and reallocate these supporting assets to US tb to further reduce the risk associated with negative funding rate environments.

Ethena Laboratories

Ethena’s UStb is one of the first stablecoin projects that BlackRock has partnered with. BlackRock’s BUIDL operates as the largest tokenized treasury fund on any blockchain and runs on Ethereum (ETH).

According to DefiLlama, BUIDL has accumulated over $522 million in deposits when calculated as the total value locked in cryptocurrencies.

BlackRock may be testing the waters in the fiat-pegged token market as the company integrates more crypto-related investment vehicles. The $10 trillion asset giant also issues spot exchange-traded funds for Bitcoin (BTC) and Ether.