Hyperliquid bets on itself with USDH stablecoin debut

Hyperliquid’s new dollar-pegged USDH went live on its exchange in a USDH/USDC pair, generating over $2 million in initial transactions as the platform begins testing its strategy of reducing reliance on outside issuers.

On Sept. 24, the Hyperliquid ecosystem activated spot trading for its native USDH stablecoin, marking the first time the decentralized exchange has put its own fiat-backed asset into circulation.

The debut saw over $2 million flow through the new market, with the token holding its peg at approximately 1.001 against USDC, signaling stable, if cautious, early demand. This launch follows a validator vote last week when Native Markets, a relative newcomer, unexpectedly beat out established heavyweights like Paxos, Ethena, and Frax to issue the stablecoin.

Hyperliquid’s stablecoin play

According to Hyperliquid, USDH is anchored by reserves in cash and short-dated U.S. Treasuries, with a structure that blends off-chain custodial management and an on-chain sleeve for transparency. Native Markets has tied the stablecoin’s reporting to oracle feeds and built in an economic loop that directs half of reserve earnings into Hyperliquid’s native HYPE buybacks, while the remainder is earmarked for broader ecosystem development

Hyperliquid’s push for a native stablecoin can be seen as a play for sovereignty. With over 90% of deposits on the platform currently in USDC, the exchange’s operations are heavily dependent on an external entity, Circle. By cultivating USDH, Hyperliquid aims to reduce this reliance, capture the fees and yield generated by its primary unit of account, and exert greater control over its own monetary base.

This development unfolds against a backdrop of explosive growth for the stablecoins industry. Their total market capitalization recently surged to a record $294.56 billion (see crypto.news’ report), underscoring their critical role as the lifeblood of the cryptocurrency market.

The expansion is being fueled in part by regulatory clarity in key jurisdictions. The passage of the GENIUS Act in the U.S. and the implementation of the MiCA framework in the European Union are providing the legal certainty that encourages broader institutional adoption and usage.

Concurrently, Hyperliquid faces intensifying pressure in its core business. Its once-dominant share of the on-chain perpetuals market has receded sharply from a peak of 71% in May to approximately 38% today.

This erosion also comes as well-funded competitors like Lighter and Aster aggressively capture market share, leading to a fierce war for traders that includes tactics such as listing each other’s native tokens for leveraged trading.