STBL.com, the next-generation stablecoin protocol, has announced a strategic partnership with Ondo Finance, a blockchain technology company, as per details shared with Finbold.
The collaboration designates USDY, Ondo’s tokenized yield-bearing asset backed by short-term U.S. Treasuries and bank deposits, as primary collateral within STBL’s reserve structure, unlocking up to $50 million in USST minting capacity.
“Stablecoin design has to catch up with reality: the world is moving to tokenized reserves,” said Dr. Avtar Sehra, Co-Founder and CEO of STBL, “Our stable asset and reserve framework is built for this new paradigm – multi-tier, overcollateralized, and engineered to keep a tight peg and enable use of a variety of institutional-grade assets on-chain. Ondo’s USDY brings the right ingredients – quality collateral, clear governance, and strong controls – so USST can scale utility without diluting stability.”
Partnership brings tokenized T-bill yield into STBL’s reserve model
USDY complements STBL’s architecture as a fully collateralized instrument that delivers dollar-denominated yield to eligible holders while preserving investor protections, including first-priority security interest over the underlying assets.
Reeve Collins, Co-Founder and Chairman of STBL, added:
“STBL flips that script so the benefits of the collateral flow back to those who provide it. Partnering with Ondo helps us extend that alignment into the heart of the reserves, and it’s a major step toward making stablecoins true public-utility infrastructure for crypto and traditional markets alike.”
Ian De Bode, Chief Strategy Officer at Ondo Finance, further commented:
“We’re excited that Ondo USDY is set to drive STBL’s growth with $50 million in reserve capacity, demonstrating how institutional-grade, tokenized yield-bearing reserves underpin the future of the digital asset ecosystem. USDY’s investor protections, seamless composability, and permissionless design make it the ideal form of collateral for the next wave of stablecoin innovation.”
STBL’s reserve and compliance framework
Under STBL’s reserve and compliance framework, the protocol separates principal and yield into two distinct instruments. USST functions as a fully backed, non-interest-bearing stablecoin for payments and on-chain collateral, while YLD carries the rights to yield from the underlying assets and is accessible only to eligible holders.
This structure enables compliant yield distribution while maintaining USST’s role as a permissionless medium of exchange. Governance is fully on-chain, with parameters such as collateral haircuts, redemption spreads, and fee routing adjustable as market conditions evolve.
To further streamline participation, STBL indexes issuer and custodian allowlists directly, removing redundant KYC steps and ensuring yield distribution remains within defined regulatory boundaries. Dynamic mint-and-burn mechanics are designed to preserve the peg without reliance on a centralized issuer.
In practice, the model allows institutions to mint USST against Ondo’s USDY, retain yield exposure via YLD, and unlock liquidity while maintaining regulatory clarity. Together, STBL and Ondo aim to demonstrate how yield-bearing tokenized assets can serve as compliant, transparent collateral for stablecoins across both DeFi and institutional markets.
Featured image via Shutterstock.
