Bitget enters real-world asset race with yield-bearing BGUSD stable asset

Crypto exchange Bitget has entered the expanding market for crypto investment products with the launch of BGUSD, a yield-bearing stable asset backed by tokenized real-world assets.

The company announced that BGUSD offers an annual yield of 4%, which is credited daily to users’ spot accounts. Subscriptions to BGUSD can be made using either USDC (USDC) or USDt (USDT), and the asset is redeemable back to USDC on demand.

The company said the yield is derived from a basket of tokenized instruments, including US Treasury bills and high-grade money-market funds. “These assets are managed via partnerships with regulated institutional tokenization providers such as Superstate,” Bitget CEO Gracy Chen told Cointelegraph.

The product’s structure is designed to reduce exposure to crypto volatility while delivering returns through traditional financial instruments. 

In response to questions about transparency, Chen said that Bitget is preparing to roll out third-party attestations to provide visibility into BGUSD’s asset backing.

“Transparency and accountability are core principles of BGUSD’s framework,” she said. “While independent attestations are in the works, our institutional partners are already subject to rigorous audit requirements and regulatory oversight.”

Chen clarified how Bitget maintains liquidity for users who want to redeem BGUSD. The executive said Bitget directly manages the reserve pool, which includes stable, on-hand assets like USDC. 

According to Chen, BGUSD does not fall under the definitions of a stablecoin or a security and is not subject to specific licensing requirements.

“It’s structured as a yield-bearing stable asset certificate that’s exclusive to the Bitget platform,” Chen told Cointelegraph.

Chen added that Bitget will limit access to BGUSD in jurisdictions where digital asset restrictions apply.

Related: Stablecoins’ dominance due to limitations of US banking — Jerald David

Bitget’s move into yield-bearing stablecoins comes as the asset class has surged to $11 billion. According to a Pendle report, yield-bearing stablecoins climbed from $1.5 billion at the start of 2024 to $11 billion as of May 21. This represents 4.5% of the entire stablecoin market. 

The growth of yield-bearing stablecoins is attributed to increasing regulatory clarity in the United States under President Donald Trump’s administration.

According to a Feb. 18 filing, the US Securities and Exchange Commission (SEC) approved exchange operator Figure Markets’ interest-bearing stablecoin. This made the company the first to receive US approval for a yield-bearing stablecoin. 

Apart from a favorable response from the SEC, proposed bills like the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) also signal a positive direction for stablecoins in the US. 

Magazine: TradFi is building Ethereum L2s to tokenize trillions in RWAs: Inside story