BitVault Launches Bitcoin-Backed Stablecoin bvUSD on Katana June 19 2025

BitVault, a company focused on integrating Bitcoin with decentralized finance (DeFi), has announced its plans to launch a Bitcoin-backed stablecoin named bvUSD on Katana, a blockchain incubated by Polygon Labs and GSR. The launch is scheduled for June 19, 2025, and aims to unlock Bitcoin’s liquidity within the DeFi ecosystem. This move is part of BitVault’s broader strategy to enhance Bitcoin’s utility beyond its traditional role as a store of value.

BitVault’s innovative approach involves backing the bvUSD token with Bitcoin reserves, rather than traditional fiat currencies. This strategy capitalizes on Bitcoin’s robust market presence and addresses liquidity challenges in decentralized finance. By leveraging Bitcoin as collateral, BitVault aims to provide a stablecoin that maintains value stability without relying on fiat assets, potentially appealing to investors seeking exposure to BTC’s security and decentralization.

The launch on Katana positions bvUSD within a rapidly growing ecosystem focused on high-yield DeFi opportunities. This integration is expected to facilitate seamless use of bvUSD in various DeFi protocols, enhancing Bitcoin’s utility beyond simple store-of-value functions. Alain Kunz, Director of GSR, highlighted the significance of this integration, stating that BitVault adds a new layer of stablecoin utility to Katana’s ecosystem, enabling BTC to take on a more productive role within Katana’s high-yield DeFi stack.

BitVault’s recent $2 million funding round, which attracted strategic investors including GSR, Gemini, Auros, and Keyrock, reflects strong institutional confidence in the company’s vision. This investment coincides with increased regulatory clarity following the passage of the Genius Act, which has encouraged major banks and tech companies to explore stablecoin issuance. The involvement of GSR and other strategic partners suggests a focus on sophisticated arbitrage and yield strategies designed to create liquidity and demand for BTC-backed stablecoins.

Unlike fiat-backed stablecoins such as USDC, bvUSD’s Bitcoin backing introduces a novel asset class that could diversify stablecoin offerings and mitigate risks associated with fiat currency fluctuations. BitVault’s protocol is designed to enable yield generation on staked bvUSD, employing crypto arbitrage strategies to optimize returns. This approach not only incentivizes holding bvUSD but also enhances Bitcoin’s role within decentralized finance by transforming it into a productive asset capable of generating passive income.

Michael Kisselgof, Core Contributor at BitVault, emphasized the protocol’s mission: “Bitcoin was built for moments of fracture. BitVault was built to make it usable.” This statement underscores the project’s goal to increase Bitcoin’s practical utility in financial ecosystems, particularly through permissioned borrowing and DeFi features adapted from Liquity V2. BitVault’s deployment on Katana leverages the chain’s infrastructure to support high-yield DeFi applications, incorporating a permissioned borrowing layer that balances decentralization with compliance and security.

This architecture aims to attract institutional investors by offering familiar DeFi functionalities alongside enhanced risk management. The combination of Bitcoin backing and institutional-grade features positions bvUSD as a potentially transformative stablecoin within the evolving DeFi landscape. BitVault’s launch of bvUSD represents a pioneering effort to bridge Bitcoin’s value with the stablecoin market, offering a unique solution that enhances liquidity and yield opportunities in DeFi. Supported by strategic investors and regulatory momentum, bvUSD could redefine how Bitcoin interacts with decentralized finance, fostering greater adoption and utility. As the stablecoin sector evolves, BitVault’s approach may serve as a blueprint for integrating major cryptocurrencies into stable, yield-generating financial products.