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Crypto service provider and custodian BitGo announced plans to launch its USD Standard (USDS) dollar-backed stablecoin.
Today BitGo announced USDS will feature 1:1 United States dollar backing through a combination of short-duration T-bills, overnight repos, and cash. Users of the stablecoin will also be rewarded for providing liquidity and engaging with its ecosystem. BitGo plans to launch the new stablecoin in January, 2025.
The announcement explicitly singles leading stablecoin Tether (USDT) and Circle’s USD Coin (USDC) as current market offerings that BitGo hopes to upend with the launch of its USDS alternative. The company explained that instead of funneling significant rewards back to the issuers and partners the firm plans to redistribute up to 98% of its earnings who support the ecosystem.
💸 Introducing $USDS
The first open-participation stablecoin to redefine financial freedom.
Built on a foundation of transparency, USDS empowers the community by democratizing the stablecoin experience and putting the power back in your hands.
🏦 1:1 USD Backing: USDS is fully… pic.twitter.com/pfzXWGZ1ze
— BitGo (@BitGo) September 18, 2024
Monthly audits
The USDS stablecoin will be released by the BitGo New York Trust and the company promises real-time proof-of-reserves published on its website and monthly audits conducted by top-tier accounting firms. The announcement follows protection group Consumers’ Research raising alarm around Tether’s U.S. dollar reserves and calling it a “disaster for consumers waiting to happen.”
The report highlighted the lack of an audit by a credible firm as part of its rationale. BitGo also promises to maintain market neutrality in its approach to USDS, with “active participation of a broad network” and reward deployment to develop more liquidity.
The announcement follows former United States House Speaker Paul Ryan sharing his support of stablecoins in June reports. Ryan, who served as the top Republican in the House under Presidents Obama and Trump before retiring in 2019, is urging lawmakers to consider creating a suitable crypto regulatory framework, said:
“If other countries are successful at bolstering their currencies’ influence while dumping Treasury debt, the U.S. will need to find new ways to make the dollar more attractive. Dollar-backed stablecoins are one answer.”
