Crypto exchange Hyperliquid announced plans to launch a dollar-pegged stablecoin. The decision on its issuance will be put to a validator vote, but the project already attracted the attention of leading industry players, sparking fierce competition.
Decentralized derivatives exchange Hyperliquid revealed plans to issue USDH, its own dollar-pegged stablecoin. In a Discord post, the team stated that the initiative is still under discussion, with the final decision to be made through a validator vote.
The choice of the company to develop the new asset will also be subject to a vote, immediately triggering competition among top issuers eager to take part in creating and launching USDH. The following contenders expressed interest:
- Paxos proposed issuing USDH in full compliance with the U.S. GENIUS Act and Europe’s MiCA regulations. Paxos pledged to allocate 95% of stablecoin reserve income to buy back HYPE tokens for redistribution among users, validators, and partners. The stablecoin would be deployed on both HyperEVM and HyperCore, broadening institutional and FinTech access. Paxos also plans to leverage its global network of over 70 financial partners and integration experience with PayPal, Venmo, and MercadoLibre to scale USDH institutionally.
- Stripe suggested issuing USDH via its payment platform Bridge, pledging to direct part of reserve income to the Hyperliquid Assistance Fund while ensuring regulatory compliance. However, the proposal faced criticism from rivals citing potential conflicts of interest, as Stripe is simultaneously developing its own blockchain, Tempo, which could divert users away from Hyperliquid.
- Agora, with support from payment provider MoonPay, promised to deliver the “regulated payment rails” and community-friendly terms for USDH, avoiding centralization risks and ecosystem “capture.” The initiative already gained backing from venture investors who called it the most promising option.
- Frax proposed a radical model — directing all reserve income from USDH back to the community. Unlike rivals pledging partial revenue sharing, Frax’s version would be based on its frxUSD stablecoin, ensuring full collateralization and an open economy.
- Sky (formerly Maker) emphasized yield and DeFi investments. Rune Christensen, Co-Founder of the protocol, proposed issuing USDH with a 4.85% yield on Hyperliquid, convertible into USDS with a 4.75% yield. He also pledged $25 million to develop an autonomous DeFi fund within Hyperliquid and build a multichain infrastructure for the stablecoin via LayerZero.
- Native Markets, founded by seasoned Web3 veterans to launch USDH, offers full backing with U.S. Treasuries and cash managed by institutional partners, along with an asset architecture designed to meet both current and anticipated regulatory requirements. The proposal calls for splitting reserve yields evenly, with half directed to the Hyperliquid support fund and the other half dedicated to the growth and adoption of USDH. Issuance and redemption are set to be handled through the Bridge platform. The initiative emphasizes deep integration with HyperEVM, HIP-3, and ecosystem applications, as well as a firm commitment to issuer independence.
Update (Sept. 10): Ethena Labs has entered the race to issue Hyperliquid’s USDH stablecoin, becoming the sixth contender. The company proposed a model in which USDH would be fully backed by USDtb — a stablecoin tied to BlackRock’s BUIDL fund and issued through Anchorage Digital Bank. About 95% of reserve revenue would be returned to the Hyperliquid community, with oversight managed by an elected network of validators. In addition, Ethena pledged to allocate at least $75 million in ecosystem incentives.
Update 2 (Sept. 11): Paxos unveiled the second version of its proposal to launch the USDH stablecoin, designed for global scale. A key element is a partnership with PayPal, under which the HYPE token will be available for purchase through PayPal and Venmo, USDH will be offered with free deposits and withdrawals, and the company will allocate $20 million to support the ecosystem. The plan introduces a new rewards structure where Paxos will earn no more than 5% of revenue, and only after certain total value locked thresholds are reached. All fees will be collected in HYPE tokens, aligning the company’s interests with those of the community. Paxos also claims it is the only issuer able to legally launch such assets in Europe and other regions, enabling USDH to scale worldwide in full compliance with regulatory standards.
Update 3 (Sept. 12): Ethena Labs founder Guy Young announced that the company had listened to community feedback and withdrawn its application to issue USDH. He also congratulated Native Markets as the frontrunner in the race to launch the stablecoin. At the same time, two new contenders entered the field:
- OpenEden proposes launching USDH as an institutional-grade stablecoin with a focus on regulatory compliance, independent credit ratings, and partnerships with leading banks. The reserves would be backed by tokenized U.S. Treasuries managed by BNY, with yields and fees flowing entirely back into the Hyperliquid ecosystem through HYPE buybacks and community support.
- BitGo proposes issuing USDH as a native Hyperliquid asset, fully backed by U.S. dollar cash and short-term Treasuries. Reserve proceeds would be used to buy and stake HYPE with transparent on-chain distribution of rewards across the community. Minting and redemption would be available around the clock through USDC, USDT, fiat, and other assets, while reserves would undergo audits twice a month by independent firms. BitGo’s involvement ensures institutional-grade custody, compliance, and infrastructure, including globally licensed trust companies, robust banking rails, and access to thousands of institutional clients.
Against the backdrop of tightening stablecoin regulations in the U.S., Europe, and Asia, the chance to become the issuer of USDH is seen by these companies as a strategic move to secure long-term presence in the fast-growing Hyperliquid ecosystem.
According to Dr. Tobias Glas, CAIA, Co-Founder and Managing Partner at crypto-matter.com, the launch of USDH carries strategic significance not only for Hyperliquid but for the industry as a whole. “There are several reasons. First, Hyperliquid gains the ability to build its own settlement infrastructure and reduce dependence on external stablecoins. Second, we are talking about a market worth billions of dollars — the launch of USDH could become a key revenue stream for the ecosystem and a tool to attract new users. And third, this case demonstrates that competition for issuing stablecoins is becoming a strategic direction for the industry. It’s not only about technology, but also about controlling liquidity and distributing profits,” Dr. Glas commented exclusively for CoinsPaid Media.
Beyond the stablecoin launch, the Hyperliquid team is preparing updates for the spot market. Plans include an 80% fee reduction for pairs between two spot-quoted assets, boosting liquidity and improving user experience. Hyperliquid also intends to expand access to spot quotes for all ecosystem participants.
Excitement surrounding the USDH launch pushed Hyperliquid’s native token HYPE to new ATHs several times, reaching $54.85, according to CoinGecko. The surge attracted the attention of major TradFi players. Singapore-based Lion Group Holding, a Nasdaq-listed trading platform, announced plans to convert all its treasury assets into HYPE.
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