BitGo’s USDS Stablecoin to Challenge Tether with $10B Target
Vijay Gir18 Sept 20242 min read
BitGo, a leading name in crypto custody, is shaking things up. They’re about to launch a new stablecoin called USDS in January 2025. But this isn’t just another coin joining the crowd of stablecoins dominated by big players like Tether and Circle. BitGo’s plan is to stand out by rewarding institutions that contribute liquidity to their network, offering something no other stablecoin does right now.
What Makes USDS Different?
Stablecoins should be stable by nature. They’re usually pegged to a real-world asset like the U.S. dollar, making them valuable in the volatile crypto space. Treasury bills, overnight repos, and cash will back USDS, aiming to make it solid and trustworthy. But here’s where it gets interesting: BitGo wants to create an “open-participation” stablecoin. Anyone who adds liquidity to the system can earn rewards, not just a select few.
According to BitGo’s CEO Mike Belshe, “A stablecoin’s true value comes from the people using it, the liquidity they provide, and the access points for interchange.” It’s not just about creating another coin; it’s about making the ecosystem more rewarding for those who help keep it going.
Why Should Liquidity Providers Care?
Unlike other stablecoins, USDS doesn’t just sit there holding value. It actively rewards institutions that support it. Each month, BitGo will take the returns generated from the stablecoin’s reserves and pass them back to the liquidity providers. It’s like receiving payment for helping the system run smoothly. And they’re being careful not to cross into the territory of securities laws, which have tripped up other crypto projects in the past.
Belshe explained it simply: “At the end of each month, we generate some return from the cash held in the underlying fund and pass it back to participants on a pro-rata basis.” It’s a win-win for those involved.
BitGo Aiming High
BitGo isn’t playing small here. Their goal is to get $10 billion in assets within a year. That’s a huge number, but they believe their unique approach will attract big institutions looking for both stability and rewards. USDS will also be listed on major exchanges, making it accessible to a wider audience.
On top of that, BitGo is committed to bringing transparency. They’re offering real-time proof of reserves and monthly audits, which could make people trust USDS more than some of the other coins out there.
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