Tether and Tokenization Trailblazers Launch Startup to Revolutionize Digital Dollars with GENIUS Alignment

In a groundbreaking move that could reshape the landscape of digital finance, a team of stablecoin and blockchain innovators has unveiled a pioneering startup, STBL, with a focus on creating GENIUS-aligned digital dollars. This venture seeks to bridge traditional finance principles with the burgeoning world of tokenized assets, offering investors novel ways to manage and profit from their digital holdings.

A New Era for Stablecoins

Traditionally, finance has allowed for the separation of capital from coupons, enabling investors to manage interest-payment flows independently from the principal. Now, STBL is bringing this concept to the digital realm. By converting digital assets into a dollar-pegged stablecoin and a yield-bearing non-fungible token (NFT), STBL allows investors to hold and trade components separately, catering to varying risk appetites.

The startup is currently in beta testing, but its innovative approach already promises to revolutionize stablecoin issuance. Unlike traditional stablecoins, such as USDT, where issuers like Tether retain the interest on the reserves, STBL allows depositors to become the minters, thus keeping the returns.

The Vision Behind STBL

Reeve Collins, co-founder of STBL and a former Tether co-founder, expressed the mission succinctly: “Our mission at STBL is to evolve stablecoins from corporate products into public infrastructure. For the first time, minters, not issuers, retain the value of reserves. This is the defining shift of Stablecoin 2.0: money that is stable, compliant, and built to serve the community.”

When yield-bearing real-world assets (RWAs)—like Franklin Templeton’s BENJI, BlackRock’s BUIDL, or Ondo’s USDY—are deposited into the STBL protocol, they split into a stablecoin (USST) and a yield-accruing NFT (YLD). This design aims to align with the U.S. GENIUS Act and other regulatory frameworks by separating principal from yield, ensuring compliance while maximizing utility.

Navigating Regulatory Challenges

CEO Avtar Sehra, also a co-founder of STBL and former CEO of Kaio, emphasized the importance of regulatory alignment. “When a user who’s already whitelisted with a Franklin Templeton or BlackRock fund locks that asset into STBL, they receive an NFT that controls the vault,” he explained. “You hold the NFT and accrue interest, while the stable asset can be used as collateral or to mint an ecosystem-specific stablecoin aligned with GENIUS Act requirements.”

Sehra and Collins spent considerable time exploring how RWAs could integrate into decentralized finance (DeFi) as collateral. They questioned the traditional views on asset wrapping and its implications on securities regulations, striving for a solution that maintained compliance while providing flexibility.

Overcoming Security Concerns

To ensure that the USST stablecoin isn’t classified as a security, STBL has developed a sophisticated mechanism to maintain its dollar peg. This involves slightly over-collateralizing the stablecoin and implementing an incentive system connected to mint fees and burn credits, especially in volatile markets. Sehra described STBL’s peg-maintenance system as “synthetic” rather than “algorithmic,” indicating a blend of algorithmic interest-rate components and solid over-collateralization with market assets.

“The reason I call it a synthetic is because, even though it has this interest-rate algorithmic component to it, it is 103% over-collateralized with pure money market assets,” Sehra noted. “As a result of this novel structure, eligible participants holding permitted RWAs can mint and burn compliant stablecoins. Minters can hold the yield, while the stable asset can be used without breaching the non-yield bearing requirements of the GENIUS Act.”

Market Reception and Future Prospects

The introduction of the STBL governance token has been met with significant enthusiasm. Launched on September 16, its token generating event is regarded as one of 2025’s most successful, initially valued at $100 million and quickly surpassing a $1 billion market cap. It currently stands at $1.3 billion, having reached an all-time high of about $2.3 billion within 24 hours.

Looking ahead, STBL plans to initiate a $100 million minting using Franklin Templeton’s BENJI token and announce several partnerships, including one with a U.S.-based payments firm. The protocol is set to open to the public in the fourth quarter, marking another significant milestone for this innovative startup.

A Balanced Perspective

While STBL’s approach garners excitement, it’s essential to consider the challenges it faces. Navigating regulatory landscapes, ensuring security, and maintaining decentralized governance will be crucial. Yet, the potential for transforming stablecoins into public infrastructure, where minters benefit directly, presents a compelling vision for the future of digital finance.

As the world of finance continues to evolve with technological advancements, STBL stands at the forefront, challenging traditional paradigms and offering a glimpse into what the future of digital assets may hold. Whether it can fully realize its ambitious goals remains to be seen, but its impact on the stablecoin landscape is undeniable.