STBL Bridges Yield and Stability with Treasury-Backed Stablecoin

STBL, a next-generation stablecoin protocol, has announced a strategic collaboration with Ondo Finance, a leader in real-world asset (RWA) tokenization, to mint $50 million in USST stablecoins backed by Ondo's USDY, a tokenized U.S. Treasury yield product. The partnership marks a significant step in redefining stablecoin reserve design by integrating institutional-grade, yield-generating collateral into a decentralized framework.

USDY, which is 100% backed by short-term U.S. Treasuries and bank deposits, provides institutional-level yield while maintaining investor protections. By leveraging USDY as primary collateral, STBL joins a select group of stablecoin issuers that have directly incorporated compliant, yield-bearing assets into their reserve models. Ondo Finance's Chief Strategy Officer Ian De Bode emphasized that the initiative demonstrates how tokenized, institutional-grade reserves can underpin the future of digital assets.

STBL's reserve architecture separates principal and yield into two distinct tokens: USST, a fully backed, non-interest-bearing stablecoin for payments, and YLD, which carries yield rights from underlying assets. This design ensures compliance with regulatory standards while enabling institutions to earn returns from real-world assets. Reeve Collins, STBL's co-founder and chairman, noted that the model "flips the script" by directing collateral benefits back to providers, aligning incentives for both DeFi and traditional finance ecosystems.

The partnership comes as stablecoin transactions exceed $2.4 trillion, with investors seeking assets that balance compliance, liquidity, and yield. STBL's approach addresses persistent challenges in the stablecoin space, including transparency and regulatory alignment. By tokenizing U.S. Treasuries, the protocol bridges the gap between decentralized systems and TradFi, offering a scalable solution for institutional and retail users.

The collaboration with Ondo Finance positions STBL to capitalize on growing demand for RWA-backed stablecoins. USDY's institutional controls and composability enable seamless integration with DeFi platforms, while its permissionless design supports broad adoption. STBL's dynamic mint-and-burn mechanics further stabilize USST's peg to the U.S. dollar without centralized oversight.

Industry analysts view the partnership as a model for future stablecoin innovation. As traditional finance and crypto converge, STBL and Ondo's initiative highlights how tokenized assets can enhance liquidity and yield while maintaining regulatory clarity. The move also aligns with broader trends, including Mastercard and Coinbase's interest in acquiring stablecoin firm BVNK.

With the U.S. government increasingly scrutinizing stablecoin reserves, STBL's use of Treasuries as collateral aligns with proposed frameworks such as the GENIUS Act. The protocol's transparent, on-chain governance and auditable reserves further differentiate it from legacy stablecoins. However, challenges remain, including USDY's limited availability to U.S. retail investors and the need for continued regulatory clarity.

Markets will closely watch how this partnership shapes on-chain financial stability. With the initial $50 million in USST minting underway, STBL and Ondo aim to establish a blueprint for compliant, yield-enhanced stablecoin infrastructure.

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Source: [1] STBL taps Ondo Finance to strengthen stablecoin reserves with ... (https://invezz.com/news/2025/10/10/stbl-taps-ondo-finance-to-strengthen-stablecoin-reserves-with-us-treasuries/)

[2] STBL and Ondo Finance Join Forces: $50M Tokenized Treasury ... (https://coincentral.com/stbl-and-ondo-finance-join-forces-50m-tokenized-treasury-reserves-power-next-gen-stablecoin/)

[3] STBL selects Ondo's USDY as primary collateral to back $50m in ... (https://finbold.com/stbl-selects-ondos-usdy-as-primary-collateral-to-back-50m-in-stablecoin-issuance/)

[4] STBL to leverage Ondo's USDY as primary collateral to mint up to ... (https://www.thestreet.com/crypto/markets/stbl-usst-ondo-finance-usdy)

[5] STBL Partners with Ondo Finance for $50M Tokenized Stablecoin ... (https://blockonomi.com/stbl-partners-with-ondo-finance-for-50m-tokenized-stablecoin-reserves/)

[6] STBL Research: USST/YLD & Governance Token Framework (https://blog.ju.com/stbl-usst-yld-governance/)

[7] STBL USDY Partnership Unlocks $50M in USST Minting (https://web.ourcryptotalk.com/news/stbl-usdy-partnership-unlocks-50m-in-usst-minting)

[8] STBL Stablecoin: Yield-Splitting, RWA Backed, Community-Led (https://dropstab.com/research/crypto/stbl-a-new-breed-of-stablecoin)

[9] STBL picks Ondo's USDY as primary collateral (https://cointelegraph.com/press-releases/stbl-picks-ondo-s-usdy-as-primary-collateral-unlocking-50m-in-usst-minting-capacity)

[10] STBL Tokenomics & Governance Framework | STBL Docs (https://docs.stbl.com/tokenomics-and-governance/overview/)