BitGo's new stablecoin USDS is set to launch in 2025, sharing profits with liquidity providers.

The US cryptocurrency custody company BitGo recently announced at the Token 2049 global Web3 conference in Singapore that it will launch a new stablecoin, USDS, pegged to the US dollar in January 2025. The company also plans to offer incentives to institutions that provide liquidity for USDS.

Another New Stablecoin USDS, with an Expected Issuance of $10 Billion

According to CoinDesk, BitGo CEO Mike Belshe stated that the new stablecoin USDS is backed by short-term U.S. Treasuries, REPO agreements with buyback provisions, and cash. He emphasized, "The most important thing is to reward those who construct stablecoins, which is the main reason for launching USDS."

Belshe also mentioned that the true value of stablecoins comes from those who are "willing and actually using it," providing "liquidity" and access points for transactions. The plan is to list USDS on all major exchanges, with assets holding USDS expected to reach $10 billion by September 2025.

BitGo's stablecoin USDS aims to reward the "institutions providing liquidity for USDS," and BitGo will also distribute some of the income from reserve assets - short-term Treasury bills and cash - to these institutions. Belshe added, "At the end of each month, we will return to them in the same proportion based on the ratio of participating institutions providing cash support for USDS."

In the past, there have been stablecoins that distributed rewards to institutions - USDV: a paradigm of stablecoins with full-chain transparency.

Strict SEC Regulation on the Cryptocurrency Industry, Profit-bearing Stablecoins Unable to Enter the Market

Belshe stated that some stablecoin projects have introduced stablecoins with profit functions to allow users to receive returns.

However, the U.S. Securities and Exchange Commission (SEC) has been stringent in regulating the cryptocurrency industry recently, considering any cryptocurrency products with investment returns or similar profit mechanisms as securities. Consequently, these stablecoins would also fall under such regulation. He also mentioned, "You can only choose to join the U.S. or non-U.S. markets. Projects like Mountain Protocol and Lift Dollar opt for non-U.S. markets because as soon as they operate in the U.S., they are immediately treated as securities."

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