SINGAPORE — BitGo plans to introduce a dollar-backed stablecoin next year, differentiating itself in a crowded market by offering rewards to institutions that provide liquidity to the network.
"The main reason for launching USDS is that, while existing stablecoins serve a good function, we see an opportunity to create a more open and fair system that promotes innovation and, most importantly, rewards those who build the network,” CEO Mike Belshe said in an interview with CoinDesk before his keynote at Token2049. “A stablecoin’s true value comes from the people using it, the liquidity they provide, and the access points for interchange.
BitGo's offering will differ from its rivals with its rewards-based approach, which incentivizes institutions that are providing liquidity to the USDS network by distributing a portion of the returns generated from its reserves. While this might sound like it is treading dangerously close to being a dividend and thus classifying the whole operation as an investment contract, Belshe says the difference lies in that it's not distributing the proceeds to the end user, but rather to the institutions providing the liquidity.