BitGo Selected To Issue FYUSD Dollar-Pegged Stablecoin

Digital asset company New Frontier Labs has partnered with BitGo Bank & Trust National Association, the entity that crypto infrastructure company BitGo will use to issue and provide custodial services for the FYUSD stablecoin, a dollar-pegged token for Insitutional investors in the Asia region.

BitGo’s announcement said FYUSD is compliant with the GENIUS Act stablecoin regulatory framework. The regulations include 1:1 backing with cash deposits held by a custodian or short-term US government debt instruments, anti-money laundering (AML) requirements and know-your-customer (KYC) checks.

The company also developed “Fypher,” a suite of stablecoin infrastructure tools that provides a “programmable settlement” layer for the FYUSD token that allows it to be used by autonomous AI agents for commercial transactions.

US Treasury Secretary Scott Bessent has touted stablecoins as a way to preserve US dollar dominance by reducing settlement times, transaction costs and democratizing access to US dollars for individuals without access to traditional banking infrastructure. 

Related: 21Shares taps BitGo for expanded regulated staking, custody support across US, Europe

Stablecoins are down from the market cap peak of over $300 billion

The total market capitalization of stablecoins is over $295 billion at the time of this writing, according to RWA.XYZ, down from the peak of over $300 billion recorded in December.

Stablecoin issuer Tether, the issuer of the USDt (USDT) dollar-pegged token, is on-track for the steepest monthly drop in USDt circulating supply since the collapse of the FTX crypto exchange in 2022. At time of writing, circulating supply was 183.64 billion USDT, CoinMarketCap data showed.

While USDt remains the world’s largest stablecoin by market capitalization, its circulating supply is down $1.5 billion so far in February, data from Artemis shows. This is shaping up to be the second month of ramped up user redemptions, following a $1.2 billion drop in January.

Stablecoin redemptions could signal a broader contraction in the crypto market, as investors liquidate their positions and move their holdings off-chain, potentially into other investments.

However, spokespeople for Tether told Cointelegraph that the data represent short-term positioning, rather than a long-term trend of sustained outflows and market contraction.

Magazine: Bitcoin payments are being undermined by centralized stablecoins