Ethena Raises $100M to Finance Synthetic Stablecoin Targeting TradFi Institutions

Ethena, developer of the synthetic stablecoin USDe, has raised $100 million to finance a similar token targeted at traditional financial (TradFi)

Synthetic stablecoin issuer Ethena has raised $100 million in a funding round to launch a new stablecoin targeting traditional financial institutions, Bloomberg reported Monday.

The funding round closed in December and included participation from Franklin Templeton and Fidelity Investments-affiliated F-Prime Capital, the report said, citing a person familiar with the matter.

Ethena founder Guy Young said in a blog post in January that the company planned to roll out iUSDe, a token tailored for regulated financial institutions.

A synthetic stablecoin, USDe differs from other stablecoins in that it is not fully backed 1:1 by fiat assets. Instead, it maintains its peg by using stablecoin collateral and taking futures positions with large open interest.

USDe's market capitalization has surged to about $6 billion this month, making it the third-largest stablecoin by market cap behind Tether's USDT and Circle's USDC, which are valued at $142 billion and $57 billion, respectively.

Some observers have touted USDe as a potential safe haven during periods of greater volatility in the broader crypto market. Arthur Hayes, chief investment officer of Maelstrom, said the digital asset fund has increased its exposure to USDe "to record levels."

"We will be positioned with copious amounts of dry powder ready to buy the dip on Bitcoin," added Hayes, who is an investor in and an adviser to Ethena.

Ethena did not immediately respond to CoinDesk's request for comment on the $100 million funding round.