It’s been a banner year for the stablecoin market – 11 straight months of inflows and an all-time market cap of $171 billion. Everyone’s jumping in, even the industries stablecoins threaten to disrupt.a platform to help banks issue stablecoins and use them across its network, with Spanish bank BBVA as one of its first takers.
Ethena Labs launched in February 2024 on the promise of returning consistent yield through its stablecoin sUSDe. It delivered, and has amassed more than $1.2 billion in market cap. Others followed, such asDespite the attractiveness of this innovation, yield-bearing stablecoins are restricted in most major financial hubs, such as the U.S., because they are almost certainly securities operating outside of regulatory oversight.
Leading asset managers BlackRock and Franklin Templeton are early movers into this space, having launched tokenized money market funds that to date have amassed nearly $1 billion in assets. More are to come, with. The benefit over stablecoins for this purpose is clear, as traders can continue to earn yield while posting BUIDL as collateral.
Achieving this, however, requires significant advancements in the underlying market infrastructure to enable the widespread use of tokenized funds as stablecoin proxies or sources of collateral. Currently, BlackRock's and Franklin Templeton's products operate within closed networks, available to select investors, with limited interoperability across different blockchain platforms.