USDtb

USDtb: BlackRock-Backed Treasury Dollar Enters The Federal Stablecoin Era

USDtb has rapidly emerged as one of the most significant developments in the stablecoin sector since its December 2024 launch.

The token maintains a circulating supply approaching $1.5 billion, with reserves invested almost entirely in BlackRock's USD Institutional Digital Liquidity Fund.

That tokenized treasury product, known as BUIDL, currently manages approximately $2.5 billion in assets under management, making it the largest tokenized money market fund in existence.

USDtb addresses a specific problem: providing a fiat-backed, regulatory-compliant stablecoin alternative to the synthetic dollar products that have proliferated throughout decentralized finance. Where algorithmic and derivative-backed stablecoins have faced repeated stress-test failures, USDtb deliberately eschews complexity in favor of a transparent, Treasury-backed reserve structure.

The token has gained traction across both centralized exchanges and DeFi protocols. Bybit began accepting USDtb as margin collateral in early 2025, while lending platforms including Aave, Morpho, Euler, and Fluid have integrated the stablecoin as a deposit and collateral asset. The October 2025 transition of issuance to Anchorage Digital Bank under the GENIUS Act framework represents the first successful onshoring of a major stablecoin under new federal regulations.

From DeFi Experiment to Federally Regulated Asset

Ethena Labs announced USDtb's development in September 2024, positioning it as a complement to the firm's existing synthetic dollar product, USDe. Guy Young, who founded Ethena Labs in 2023 after nearly a decade at Cerberus Capital Management, designed USDtb to offer an entirely different risk profile from the delta-neutral derivative strategies underlying USDe.

Young spent six years at Cerberus, a $60 billion investment fund, where he served as Head of Principal Investments overseeing strategic investments across banking, specialty finance, insurance, and fintech. That traditional finance background informed his pragmatic approach to DeFi product design, favoring practical tradeoffs over ideological purity around decentralization.

The token launched on December 16, 2024, accumulating over $65 million in total value locked within its first 24 hours.

The timing coincided with strong momentum in Ethena's broader ecosystem, with the governance token ENA surging nearly 100% during the period, partly driven by a $500,000 purchase from Trump-affiliated World Liberty Financial.

The strategic pivot toward federal compliance began in July 2025, when Ethena Labs announced a partnership with Anchorage Digital Bank to bring USDtb into regulatory compliance under the newly enacted GENIUS Act. President Trump signed the legislation on July 18, 2025, establishing the first comprehensive federal framework for stablecoin issuance in the United States.

By October 2025, Anchorage Digital Bank had assumed full control of the USDtb smart contract, completing the transition from offshore DeFi product to federally regulated payment stablecoin. This marked the first time a major stablecoin with a market cap approaching $2 billion had successfully transitioned to a new issuer under direct federal oversight.

Treasury-Backed Architecture and Multi-Chain Infrastructure

USDtb operates on a straightforward reserve model: over 90% of backing assets are held in BlackRock's BUIDL fund, with the remainder allocated to liquid stablecoins facilitating redemptions.

BlackRock's BUIDL fund invests 100% of its assets in short-term U.S. government securities, cash, and repurchase agreements.

Each BUIDL token maintains a stable $1.00 value and represents a share in the underlying fund, which earns approximately 4.5% annual yield through daily dividend accruals.

BlackRock serves as fund manager and sponsor, Securitize handles transfer agent duties, and BNY Mellon provides fund administration and custody services.

The BUIDL token adheres to high KYC/AML standards, permitting transfers only between whitelisted investor addresses. This compliance layer introduces some friction compared to permissionless stablecoins but provides the institutional credibility that regulatory frameworks increasingly demand.

USDtb deploys as a LayerZero-powered Omnichain Fungible Token, enabling seamless cross-chain transfers between Ethereum, Arbitrum, Base, and Solana. Stargate serves as the bridge for cross-chain movements. This multi-chain architecture places USDtb within the broader Ethena ecosystem, joining over $10 billion in assets including ENA, USDe, and sUSDe that have adopted the OFT standard.

The smart contracts underwent three independent audits from Pashov, Quantstamp, and Cyfrin prior to launch, with no critical or medium-level findings. A community-led Code4rena audit confirmed no significant vulnerabilities.

Following the transition to Anchorage Digital Bank, U.S. Bank now acts as reserve custodian, with issuance and redemption operations running under OCC-regulated frameworks.

Ethena Labs has also developed a USDtb Liquidity smart contract in collaboration with Securitize and BlackRock BUIDL, enabling atomic swaps between BUIDL and USDtb on-chain 24/7/365. This mechanism positions USDtb as the stablecoin liquidity pair for all BUIDL users seeking instant redemption without traditional settlement delays.

Simple Supply Dynamics and Institutional Value Capture

USDtb maintains no hard-coded supply cap, with issuance determined by market demand and corresponding reserve deposits.

The circulating supply has fluctuated throughout 2025, reaching approximately $1.46 billion by late 2025. Supply contracted by roughly 22% following certain market events, dropping to approximately $1.04 billion during periods of skepticism toward Ethena's newer RWA-focused stablecoin offering.

The token operates through a direct mint and redeem mechanism available on-chain around the clock. Users can mint USDtb by depositing eligible collateral and redeem for underlying value through smart contract interactions. This differs from legacy stablecoins that often require days for fiat settlement.

USDtb does not generate yield for passive holders in the way that staked USDe (sUSDe) does through Ethena's funding rate arbitrage strategy. Instead, the token functions as a stable store of value with yield accruing to the protocol's reserve assets rather than token holders directly.

Several platforms have introduced incentive programs for USDtb holders. Bybit offered up to 5% APR paid daily for holding USDtb on the exchange as of March 2025. Copper, Zodia Custody, and Komainu Custody each provide rewards programs for institutional USDtb holders. Promotional rewards from Merkl are available for users who supply USDtb to Aave, Morpho, Euler, and Fluid.

The token serves a strategic function within Ethena's broader ecosystem as well. The protocol's Risk Committee approved USDtb as an eligible asset for the USDe Reserve Fund, allowing Ethena to close derivatives hedging positions and reallocate backing assets to USDtb during periods when funding rates turn negative.

Exchange Integration and DeFi Adoption Patterns

USDtb has secured integration across both centralized exchange infrastructure and decentralized lending protocols.

Bybit became the first major centralized exchange to support USDtb, listing the token and enabling its use as margin collateral within the Unified Trading Account system. The exchange's multi-currency margin infrastructure allows USDtb to serve as collateral for derivatives trading, spot margin, and leveraged positions without requiring conversion to USDT or USDC.

Institutional custodians including Copper, Zodia Custody, Komainu, and Coinbase Web3 Wallet provide secure storage options. Copper has built on its partnership with Ethena to enable institutional holders to earn rewards on assets held in custody. Zodia Custody, backed by Standard Chartered, Northern Trust, SBI Holdings, and National Australia Bank, offers rewards programs for eligible USDtb holdings.

On the DeFi side, USDtb functions as collateral across major lending protocols. Aave, the dominant lending venue controlling over 56% of total DeFi debt, has integrated USDtb as a deposit asset.

Morpho, which has issued over $300 million in bitcoin-backed loans and serves as the first lending protocol directly integrated by Coinbase, also supports USDtb. Euler and Fluid round out the primary lending integrations.

Market makers including Jump, Cumberland, Wintermute, Amber, GSR, and SCB Limited provide liquidity for USDtb trading pairs. Curve Finance hosts USDtb liquidity pools, with LP positions in the USDtb/USDe pool eligible for 30x rewards in Ethena's Season 3 incentive program.

The distinction between USDtb's actual utility and speculative activity remains important to note. Unlike USDe, which serves primarily as a savings and yield instrument, USDtb is designed more as a stable store of value and margin collateral. Trading volumes remain relatively modest compared to dominant stablecoins like Tether (USDT) and USD Coin (USDC), reflecting its positioning as an institutional-grade product rather than a high-velocity trading medium.

Regulatory Clarity, Centralization Tradeoffs, and Competitive Pressures

The GENIUS Act compliance represents both USDtb's primary competitive advantage and a source of structural constraints.

Under the GENIUS Act framework, covered stablecoins must maintain full 1:1 reserve backing, clear redemption processes, and transparent auditing standards. Anchorage Digital Bank, as the only federally chartered crypto bank in the United States, provides direct oversight by the Office of the Comptroller of the Currency. This regulatory positioning places USDtb in a fundamentally different category than offshore stablecoins lacking U.S. regulatory clarity.

However, federal regulation introduces centralization tradeoffs that may concern DeFi-native users. The transition from Ethena Labs to Anchorage Digital means that a federally chartered bank now controls the smart contract and issuance operations. This represents a significant departure from the permissionless ethos underlying much of decentralized finance.

USDtb also inherits risks from its underlying infrastructure.

BUIDL operates with whitelist transfer restrictions that limit token transfers to approved investor addresses. While token redemption is backed by U.S. dollars, operational or timing constraints may apply during large redemption events. The use of smart contracts, cross-chain bridges, and off-ramps introduces additional layers of infrastructure risk.

The broader Ethena ecosystem faced significant stress during the October 2025 flash crash, when USDe briefly depegged to $0.65 on Binance.

While USDtb itself maintained its peg through the event given its Treasury-backed structure, the incident highlighted reliance on centralized exchange liquidity and raised questions about systemic risk within the Ethena product suite.

Competitive pressures continue to intensify in the stablecoin sector. Tether's USDT maintains over $185 billion in market cap, while Circle's USDC commands roughly $70-75 billion. New entrants including PayPal's PYUSD, Ripple's RLUSD, World Liberty Finance's USD1, and Ondo's USDG have grown from negligible supply to multi-billion-dollar levels. Several of these issuers already operate in regulated financial environments with established user bases, enabling rapid scaling.

Criticism has also emerged around Ethena's broader positioning. In September 2025, Ethena withdrew from Hyperliquid's USDH stablecoin issuance competition after validators raised concerns about centralization and the firm's external focus beyond the Hyperliquid ecosystem. These concerns reflect ongoing tension between institutional credibility and decentralized values within the crypto community.

Navigating Institutional Adoption and Regulatory Evolution

USDtb's continued relevance depends on whether regulatory compliance translates into meaningful institutional adoption.

The GENIUS Act framework creates favorable conditions for stablecoins issued by federally chartered banks.

The legislation introduces strict 1:1 reserve requirements, mandated audited transparency standards, and a dual state-federal licensing model that traditional financial institutions can operate within. For the first time, the market has gained a clear distinction between fully collateralized regulated issuers and experimental designs.

Anchorage Digital's role as the sole federally chartered stablecoin issuer under GENIUS provides a significant first-mover advantage. The firm has built white-label capability for launching federally regulated stablecoins, potentially enabling other institutions to enter the market through Anchorage's infrastructure. Tether has also announced plans to issue USA₮ through Anchorage Digital Bank, suggesting the platform may become the default pathway for GENIUS-compliant stablecoin issuance.

Structural headwinds remain significant, however. Institutional adoption of DeFi protocols continues to lag infrastructure development, with legal uncertainty around smart contract enforceability, token ownership, and pool size limiting meaningful institutional capital deployment. Platforms like Morpho and Euler have built infrastructure that could work for institutional investors, but usage remains dominated by crypto-native users.

USDtb's position within the Ethena ecosystem creates both opportunity and risk.

The token serves as a fallback asset during periods when USDe's derivative strategies face negative funding rates, potentially providing stability during bearish market conditions. However, this interdependency means USDtb's reputation remains tied to the broader Ethena product suite, including any future stress events affecting USDe.

The stablecoin occupies a specific niche in the evolving landscape: institutional-grade, Treasury-backed, federally regulated, and multi-chain accessible. Whether this combination proves sufficient to challenge established players like USDC in the regulated stablecoin space, or whether it remains a specialized product serving Ethena ecosystem participants and margin traders, will depend largely on institutional adoption patterns and the competitive dynamics of the post-GENIUS Act market.

The infrastructure exists for significant growth. The question is whether traditional financial institutions will deploy capital into federally regulated on-chain products, or whether they will continue observing from the sidelines while crypto-native users drive adoption.