Hyperliquid Aims to Redefine Stablecoin Control with USDH Move

Hyperliquid, a prominent decentralized derivatives exchange, has outlined plans to introduce USDH, a U.S. dollar-pegged stablecoin designed to integrate directly into its ecosystem. The proposal, announced via the project’s Discord channel, is subject to a validator vote through an on-chain governance mechanism. The Hyperliquid Foundation has reserved the USDH ticker, with teams able to submit proposals to develop the stablecoin. Validators will select the winning team, ensuring the project maintains its decentralized governance model [1].

The stablecoin aims to reduce reliance on third-party stablecoins such as Circle’s USDC and Tether’s USDT, both of which dominate the broader stablecoin market. USDC, for example, accounts for 95% of the $5.6 billion in stablecoin supply currently on the Hyperliquid network [1]. By introducing USDH, Hyperliquid hopes to capture internal liquidity and potentially generate revenue from the token’s asset backing. The move aligns with a growing trend among crypto platforms to launch in-house stablecoins, a strategy also adopted by MetaMask and Stripe [1].

In tandem with the stablecoin announcement, Hyperliquid has also announced a major protocol update to reduce trading fees by 80% for dual-currency spot market pairs. These changes aim to enhance liquidity and attract more users to the platform. The update includes increased transparency, with public spot quotes becoming available and the introduction of minimum HYPE token requirements for creating trading pairs [3].

The potential approval of USDH could further intensify competition in the stablecoin market, where USDT and USDC have long held dominance. The stablecoin industry, valued at over $270 billion, is witnessing increasing regulatory scrutiny and innovation. For example, the Global Dollar Network (GDN), a Paxos-backed initiative, has launched USDG, a U.S. dollar-pegged token with a revenue-sharing model. While USDG remains significantly smaller than USDT and USDC, it has already reached $285 million in circulation and is compliant with Singapore’s evolving regulatory framework [4].

Hyperliquid’s USDH proposal also coincides with broader efforts to align with U.S. regulatory developments. The failed GENIUS Act, which aimed to provide a federal framework for stablecoins, has left the regulatory landscape uncertain. However, the trend of ecosystem-specific stablecoins suggests that platforms like Hyperliquid see regulatory clarity as an evolving part of the broader market infrastructure [1].

With its current trading volume exceeding $398 billion in perpetual derivatives and $20 billion in spot trades per month, Hyperliquid’s potential demand for a stablecoin is substantial. The approval of USDH would mark a strategic step in the platform’s efforts to control more of its economic infrastructure while navigating the broader regulatory and competitive landscape of the stablecoin market [1].

Source:

[1] Hyperliquid Moves Forward to Launch Proprietary Stablecoin (https://www.coindesk.com/tech/2025/09/05/hyperliquid-moves-forward-to-launch-proprietary-stablecoin)

[2] Better Stablecoin Buy: Tether (USDT) vs. USD Coin (USDC) (https://finance.yahoo.com/news/better-stablecoin-buy-tether-usdt-094500458.html)

[3] Hyperliquid Plans USDH Stablecoin Launch (https://coinpaper.com/10912/hyperliquid-plans-usdh-stablecoin-launch-but-there-s-a-catch)

[4] Paxos-Backed USDG Builds Global Presence Through Revenue-Sharing Model (https://cryptodnes.bg/en/paxos-backed-usdg-builds-global-presence-through-revenue-sharing-model/)