STBL has officially selected Ondo's USDY, a yield-bearing stablecoin alternative, as the primary collateral for its USST stablecoin.

This strategic partnership allows for the minting of up to $50 million in USST, backed by USDY, which itself is collateralized by short-term U.S. Treasuries and bank deposits.

Ondo's USDY has a significant footprint in the market, with $690 million in Total Value Locked (TVL) across more than 12 blockchains and support from over 100 partners. This integration is significant as it introduces a yield-generating component directly into STBL's reserves, a growing trend in the stablecoin sector to offer users more capital-efficient and productive assets.

This integration marks a key evolution for STBL by embedding yield generation directly into its reserves, allowing USST holders to benefit from productive collateral rather than idle assets—a trend gaining traction in the stablecoin space to enhance competitiveness against traditional fiat-backed options like USDT or USDC. Broader industry implications include improved liquidity and risk management for stablecoins, as yield-bearing collaterals like USDY can attract more DeFi participants while maintaining peg stability.