Cryptocurrency custodian BitGo is set to enter the stablecoin market with plans to launch a dollar-backed USDS stablecoin by 2025, according to a Sept. 18 statement.
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BitGo said USDS will be fully backed by short-term Treasury bills, overnight repos, and cash, ensuring both high liquidity and minimal risk.
The company also plans to publish evidence of its reserves in real time on a dedicated website and will have a top accounting firm conduct monthly audits to increase transparency.
The company aims to stand out in the crowded stablecoin space by offering rewards to institutions that provide liquidity to the network.
“USDS is introducing a new reward system that will distribute up to 98% of revenue to participants who support the ecosystem. This approach incentivizes all eligible institutions, exchanges, liquidity providers, and users to support and grow the USDS network, fostering a more inclusive and balanced ecosystem.”
The move would mark a major shift in the stablecoin market, where issuers have made millions of dollars in profits. According to TokenTerminal data, the two largest issuers in the space are Tether and CircleWith monthly profits of around $525 million, the two companies control around 90% of the $170 billion stablecoin industry.
However, BitGo’s USDS challenges this dominance by distributing a large portion of rewards to network participants, rather than concentrating the profits within its own company.
Growing interest from institutional investors
BitGo's move highlights growing institutional interest in stablecoins.
Over the past year, major financial companies such as PayPal and Ripple have entered the rapidly expanding field.
Stablecoins are one of the most practical crypto assets in the real world, offering a stable alternative to volatile digital assets like Bitcoin. Venture capitalist Nick Carter said, citing a recent report from Castle Island Ventures:
“[Stablecoins]are increasingly being incorporated not only into cryptocurrency transactions but also into the regular economic lives of individuals. Saving in dollars was the second most popular goal among users overall and the number one goal in Nigeria.”
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