YZi Labs Expands Investment in Stablecoin Provider Ethena

Tech-centric venture capital firm YZi Labs has enhanced its investment in Ethena, the stablecoin issuer behind USDe, supporting the digital dollar’s integration across both decentralized and centralized platforms.

This funding will propel Ethena’s USDe expansion on BNB Chain, allowing the company to advance its USDtb stablecoin and an institutional settlement layer known as “Converge,” according to a statement from Changpeng Zhao’s YZi Labs on Friday.

USDtb is supported by short-duration treasury assets, including BlackRock’s BUIDL, while Converge is an Ethereum Virtual Machine-compatible chain that focuses on tokenizing real-world assets.

This initiative aligns with YZi’s objective to “support open, scalable digital dollar infrastructures that can function as a foundational source of efficiency and liquidity for the entire financial ecosystem.”

Guy Young, CEO of Ethena Labs, remarked: “The ultimate goal of digital dollar distribution has always been to embed stable, yield-generating assets directly into the heart of the crypto economy.

“With USDe now expanding across exchanges, DeFi protocols, and global user bases, that vision is progressively becoming a reality.”

The increase in stablecoin adoption follows the US Treasury’s April prediction that the $295 billion market is set to explode to $2 trillion by 2028. A boost came in July when US President Trump signed the GENIUS Act, regarded as one of the most comprehensive stablecoin regulations to date.

USDe use cases to grow on BNB Chain

YZi, previously known as Binance Labs, initially invested in Ethena during its Season 6 Incubation Program in February 2024, prior to USDe’s public launch. USDe’s synthetic dollar is primarily backed by cryptocurrencies and stabilizes its value through a delta-neutral hedging approach that maintains a peg to $1.

The expansion of USDe on BNB Chain will build upon its April rollout, with new money markets, protocol integrations, and ecosystem partnerships already in progress, according to YZi.

Related: ASIC eases licensing rules for stablecoin distributors in Australia

Since its launch, USDe has surged to a $14 billion market cap, ranking only behind Tether (USDT) and Circle’s USDC (USDC) at $171.5 billion and $73.9 billion, respectively, according to CoinGecko data. Greater adoption of USDe could enable it to penetrate USDT and USDC’s market dominance and expand its utilization within the crypto ecosystem.