House stablecoins chip away at Tether and Circle’s dominance by redirecting the interest earned on reserves to the platforms that hold user deposits. That’s a gradual threat to incumbent issuers rather than a sudden one. For Ethena, each new partner adds demand for its infrastructure and potentially for USDe and USDtb as backing assets, which ties its growth to how many platforms sign up. The risk for traders is fragmentation: liquidity split across many smaller dollar tokens can mean wider spreads and slower redemptions under stress. Until backing mixes are disclosed, the market can’t fully price the difference between these coins.
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Two stablecoins can both say “USD” yet carry very different risks, depending on what backs them.
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Ether.fi’s new dollar token is the latest sign that crypto platforms are done lending their users’ billions interest-free to Tether and Circle, but the label on a stablecoin tells you far less than what backs it.
Summary:
- Ether.fi has launched ether.fi USD, built on Ethena’s whitelabel infrastructure, according to crypto outlet BSCN, converting more than $300 million in existing deposits
- Ether.fi has not yet published the coin’s backing mix
- Ethena’s whitelabel service lets partners launch branded stablecoins while Ethena handles issuance, custody and reserves
- Existing Ethena partners include Jupiter (jupUSD), Sui (suiUSDe) and MegaETH (USDm)
- Backing can range from USDtb, a bank-issued coin backed by dollars and BlackRock’s BUIDL fund, to USDe, a synthetic dollar whose yield depends on futures funding rates
- Tether and Circle’s combined market share fell from 91.6% in March 2024 to about 80% by October 2025, according to BlockEden
Ether.fi, a platform best known for staking ether, has launched a US dollar stablecoin called ether.fi USD, built on Ethena’s infrastructure, crypto outlet BSCN reported. According to the report, Ether.fi is converting more than $300 million in existing deposits into the new token. The company has not yet published details of how the coin is backed. The launch is the latest example of a growing trend: crypto platforms that once relied on other companies’ stablecoins now want their own.
Why platforms want their own dollar
A stablecoin is a crypto token designed to hold a steady value of one US dollar. The best known, Tether’s USDT and Circle’s USDC, are backed mainly by cash and short-term US government debt. That backing earns interest, and the issuer keeps it. For a platform holding billions of dollars of someone else’s stablecoin, that is a lot of income flowing out of the door. An analysis by blockchain infrastructure firm BlockEden estimated that Hyperliquid, a crypto derivatives exchange, held $5.97 billion in USDC, worth roughly $240 million a year in interest at a 4% Treasury yield. In effect, platforms were lending money interest-free to the stablecoin issuer.
Issuing a house stablecoin lets a platform keep that income, or share it with users. Hyperliquid launched its own coin, USDH, and wallet provider MetaMask has mUSD. The same BlockEden analysis found Tether and Circle’s combined market share fell from 91.6% in March 2024 to about 80% by October 2025, as these newer coins gained ground.
When a platform issues its own stablecoin, the interest on the reserves stays with the platform rather than flowing to an outside issuer.
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How Ethena’s whitelabel service works
Building a stablecoin from scratch means handling custody, reserves, exchange relationships and liquidity. Ethena sells a shortcut. Under its whitelabel service, a partner launches its own branded stablecoin while Ethena handles issuance, custody and reserve management. The partner controls the product design and how the coin is distributed, and Ethena says the process takes weeks rather than years.
Ether.fi would join several existing Ethena partners. Jupiter, a trading platform on the Solana network, has jupUSD. Sui, a separate blockchain, has suiUSDe. MegaETH, a newer Ethereum-based network, has USDm, which it uses to help subsidise network fees. For Ether.fi, which in August described itself as a next-generation crypto neobank, a house dollar fits naturally alongside its staking and payment products.
Same label, very different backing
The most important question for readers is not who issues a stablecoin, but what sits behind it. Ethena’s whitelabel coins can be backed by different assets, and partners can adjust the mix.
One option is USDtb, issued by Anchorage Digital Bank and backed by US dollars and BlackRock’s BUIDL fund, which holds short-term government debt. That is close to a traditional reserve-backed stablecoin.
Another is USDe, Ethena’s own “synthetic dollar”. Rather than holding cash, USDe holds crypto assets and offsets their price swings with short futures positions, so gains and losses on the two sides roughly cancel out. Much of its yield comes from funding rates, the regular payments between buyers and sellers of perpetual futures. Ethena itself states that USDe is not the same as a fiat stablecoin like USDC or USDT. If demand for leveraged crypto bets weakens, funding rates fall and so does the yield. The structure also relies on exchanges and custodians.
Partners can also use other approved stablecoins, such as USDC, or a blend. Jupiter’s jupUSD, for example, combines USDtb and USDC, while suiUSDe combines USDe and USDC. Two coins that both say “USD” can therefore carry quite different risks.
What to watch next
The first thing to watch is whether Ether.fi publishes the backing mix for ether.fi USD, alongside whether holders earn yield and how redemptions work. A coin mostly backed by USDtb would behave much like a conventional stablecoin, while heavier reliance on USDe would tie it more closely to crypto futures markets. Growth beyond the converted deposits will show whether users choose the coin rather than simply receiving it. More broadly, if more platforms follow, stablecoin liquidity could become split across many smaller brands. The practical lesson is simple: before holding any new stablecoin, check what backs it, not just what it is called.
This article was written by Eamonn Sheridan at investinglive.com.