Ethena's transformation from protocol launch to institutional powerhouse happened faster than most crypto projects achieve, securing partnerships with BlackRock, Anchorage Digital, and Securitize within its first year of operation. These alliances brought over $23 billion in managed tokenized dollar assets under Ethena's infrastructure by late 2025, demonstrating that synthetic stablecoins can attract Wall Street capital when backed by proper institutional frameworks and regulatory compliance.
The protocol's partnerships extend beyond traditional finance giants to include major crypto players like YZi Labs (Binance founder CZ's investment vehicle) and M2 Capital, creating a bridge between established finance and decentralized protocols. Understanding these relationships reveals how Ethena positioned itself as the institutional choice for yield-bearing dollar exposure in digital asset markets.
BlackRock BUIDL Integration
Ethena's most significant institutional validation came through its partnership with BlackRock, the world's largest asset manager controlling approximately $14 trillion in assets. The collaboration centers on USDtb, Ethena's treasury-backed stablecoin that derives 90% of its backing from BlackRock's USD Institutional Digital Liquidity Fund (BUIDL).
BUIDL launched in March 2024 as the first institutional-grade onchain fund to cross $1 billion in assets under management, and currently maintains total value locked exceeding $2.88 billion according to DeFi Llama data. The fund invests exclusively in cash, U.S. Treasury Bills, and short-term Treasury notes, providing stable returns while maintaining high liquidity for institutional clients.
The Block reports that Ethena and Securitize enabled 24/7 atomic swaps between USDtb and BUIDL tokens in June 2025, allowing qualified participants to move seamlessly between BlackRock's tokenized fund and Ethena's stablecoin without traditional banking hours constraints. This integration eliminates settlement delays typical of traditional finance while maintaining institutional-grade custody and compliance standards.
The partnership provides Ethena with several strategic advantages:
Regulatory Credibility comes from association with a highly regulated asset manager. BlackRock's involvement signals to institutions that Ethena meets professional standards for reserve management, custody, and operational oversight. This credibility helps Ethena access clients who cannot engage with purely crypto-native protocols lacking traditional finance backing.
Reserve Stability improves through BUIDL's diversified Treasury holdings. Unlike synthetic stablecoins dependent entirely on derivatives markets, USDtb's Treasury backing provides stable yield independent of crypto market conditions. When funding rates turn negative on perpetual futures, USDtb offers an alternative revenue source maintaining protocol sustainability.
Institutional Distribution expands as BlackRock's existing client relationships provide natural onramps for USDtb adoption. Asset managers, ETFs, prime brokers, and private credit funds already working with BlackRock can more easily incorporate USDtb into their operations compared to purely decentralized alternatives lacking familiar institutional touchpoints.
Securitize and Converge Development
Beyond simple treasury backing, Ethena partnered with Securitize to build Converge, an institutional-grade settlement layer for tokenized real-world assets. Announced in March 2025, Converge represents a fundamental infrastructure play targeting traditional finance migration to blockchain rails.
Securitize brings deep experience in asset tokenization, having worked with BlackRock on BUIDL and numerous other tokenized securities. The company specializes in regulatory compliance for digital assets, holding necessary licenses for security token issuance across multiple jurisdictions. This expertise helps Ethena navigate complex regulatory requirements that often block purely crypto-native protocols from institutional adoption.
Converge's architecture focuses on several key institutional requirements:
- EVM compatibility enables deployment across Ethereum and major Layer 2 networks
- 24/7 settlement removes traditional market hour limitations while maintaining compliance
- Institutional custody integration through partners like BNY Mellon provides familiar safeguards
- Regulatory frameworks align with securities laws governing tokenized assets
The platform aims to bring "TradFi-grade" real-world assets onchain, potentially unlocking trillions in institutional capital currently siloed in traditional finance infrastructure. Early use cases target tokenized Treasuries, corporate bonds, and structured products that institutions want to trade with blockchain efficiency but require traditional regulatory protections.
Anchorage Digital Banking Partnership
Anchorage Digital's role as the only federally chartered digital asset bank in the United States provides Ethena with crucial regulatory positioning. The bank serves as the issuer for USDtb, bringing federal oversight and banking protections that purely crypto-native issuers cannot provide.
Federal charter status means Anchorage operates under Office of the Comptroller of the Currency (OCC) supervision, the same regulator overseeing traditional national banks. This oversight includes regular examinations, capital requirements, and consumer protection standards exceeding those applied to unregulated crypto platforms.
The partnership enables several capabilities unavailable to protocols lacking banking relationships:
Ethena's synthetic dollar USDe can maintain its decentralized, derivatives-based structure for yield maximization, while USDtb offers institutions a compliant alternative backed by federally supervised reserves. This dual-product strategy serves different client segments without forcing trade-offs between decentralization and regulatory compliance.
Anchorage's custody infrastructure provides institutional-grade asset protection meeting insurance requirements for large allocations. Many institutions cannot hold significant cryptocurrency positions without qualified custodians carrying appropriate insurance and security measures. Anchorage's federal charter satisfies these requirements, enabling institutions to deploy larger capital amounts than they could with unregulated custody providers.
The GENIUS Act pathway represents perhaps the most important element. Ethena positions itself as the first stablecoin developer with a clear compliance path under pending U.S. stablecoin legislation. While regulations remain under development, Anchorage's involvement ensures Ethena can quickly adapt to new requirements as they emerge, potentially providing first-mover advantages as compliant stablecoin frameworks solidify.
YZi Labs Strategic Investment
YZi Labs, the $10 billion investment vehicle managing Binance founder Changpeng Zhao's personal fortune, has doubled down on Ethena multiple times since initially incubating the project through its Season 6 program in late 2023. CoinCentral notes that YZi's repeated investments demonstrate confidence in Ethena's synthetic dollar approach and growth trajectory.
The relationship began before Ethena's public launch, with YZi providing early-stage support and guidance as the protocol developed its delta-neutral hedging mechanisms. This early involvement gave YZi deep familiarity with Ethena's technology and team, leading to continued support as the protocol scaled.
YZi's September 2025 expansion of its Ethena stake came as USDe supply crossed $13 billion and total value locked exceeded $14 billion, making the synthetic dollar the third-largest stablecoin by market capitalization. The timing coincided with Binance adding USDe as a spot trading pair and derivatives collateral across its platforms, creating natural synergies between YZi's investment and Binance's operational support.
| Investor | Investment Size | Strategic Focus | Timeline |
|---|---|---|---|
| YZi Labs | Undisclosed, increased multiple times | CEX/DEX integration, BNB Chain expansion | 2023-2025 |
| M2 Capital | $20M ENA token purchase | Wealth management integration | September 2025 |
| Franklin Templeton | Part of $100M round | Institutional adoption | December 2024 |
| Fidelity (F-Prime) | Part of $100M round | TradFi bridge | December 2024 |
| Dragonfly | Part of $100M round | DeFi ecosystem | December 2024 |
The investment supports several specific Ethena initiatives beyond general operations. YZi's capital helps fund USDe integration across centralized exchanges, addressing one of the key requirements for ENA's fee switch activation that could drive significant value to stakers. The partnership also facilitates USDe expansion on BNB Chain, tapping into Binance's massive user base and liquidity pools.
USDtb development benefits from YZi's network within the Binance ecosystem. As exchanges seek compliant stablecoin alternatives meeting evolving regulations, YZi's backing helps position USDtb as a preferred choice across platforms where Binance maintains influence. The Converge settlement layer similarly gains distribution advantages through YZi's connections to institutional clients exploring tokenized asset integration.
M2 Capital Wealth Management Integration
M2 Capital's $20 million ENA token purchase in September 2025 came with a strategic commitment to integrate Ethena's products into M2 Global Wealth Limited's regulated offerings. This marks one of the first instances of a traditional wealth manager actively incorporating synthetic stablecoins into client portfolios through compliant channels.
M2 Holdings, based in the UAE, operates across multiple financial services including asset management, wealth advisory, and investment banking. The group's interest in Ethena reflects growing institutional recognition that crypto-native yield products address client demands for dollar-denominated returns in low-rate environments.
The integration focuses on USDe and sUSDe as alternatives to traditional fixed-income allocations. With Ethena generating double-digit yields through its hedging strategies (reaching 14% earlier in 2025), the protocol offers compelling returns compared to Treasury yields or money market funds. For wealth managers seeking differentiation in competitive markets, products offering higher returns with structured risk management become valuable portfolio components.
Regional dynamics amplify USDe's appeal in Middle Eastern markets. The Gulf region maintains strong preference for dollar-denominated assets due to currency pegs and international trade exposure. Ethena's synthetic dollar provides dollar exposure with yields exceeding what traditional banking relationships offer, addressing specific regional client preferences.
M2's track record includes earlier commitments to Sui Foundation and Nasdaq-listed Sui Group Holdings, demonstrating systematic allocation to blockchain infrastructure projects. The Ethena investment follows this pattern, positioning M2 to benefit from potential ENA price appreciation as the protocol scales while providing clients with access to innovative yield products.
Exchange Integration and Liquidity Partnerships
Beyond financial investors, Ethena cultivated relationships with major cryptocurrency exchanges that provide crucial liquidity and distribution for USDe adoption.
Bybit and Bitget were among the first exchanges accepting USDe as margin collateral for derivatives trading. This integration creates natural demand for USDe as traders seeking leveraged positions can use the stablecoin while earning yield through staking rather than holding non-productive USDT or USDC collateral. The arrangement benefits both exchanges (attracting traders seeking yield-bearing collateral) and Ethena (expanding USDe utility and circulation).
Binance's addition of USDe across multiple services in late 2025 represented a major distribution milestone. As the largest cryptocurrency exchange by volume, Binance's support exposes USDe to hundreds of millions of potential users. The integration includes spot trading pairs, futures collateral acceptance, and inclusion in Binance's yield products, creating multiple touchpoints for user engagement.
These exchange relationships serve strategic purposes beyond simple listing. Each integration provides data points demonstrating USDe's market acceptance and operational reliability, factors institutional allocators consider when evaluating stablecoin exposure. The cumulative effect of major exchange adoption creates network effects where USDe becomes increasingly useful as availability expands.
Hyperliquid USDH Proposal
Ethena's September 2025 proposal to become the issuer of Hyperliquid's native stablecoin USDH demonstrates how its institutional partnerships create competitive advantages for new business development. CryptoSlate details that Ethena positioned its proposal around the institutional backing it secured through BlackRock, Anchorage, and Securitize partnerships.
The proposal outlined USDH backing through USDtb, providing indirect exposure to BlackRock's BUIDL fund for Hyperliquid's ecosystem. This structure would channel at least 95% of reserve-generated revenue to Hyperliquid's Assistance Fund, HYPE token purchases, and validator distributions, creating aligned incentives between Ethena and the Hyperliquid community.
Beyond basic stablecoin issuance, Ethena committed $75 million in incentives to support Hyperliquid's HIP-3 equity perpetual swaps markets. The protocol also proposed establishing an elected guardian network of Hyperliquid validators to oversee USDH operations, removing single-issuer control concerns that often arise with stablecoin centralization.
Securitize's involvement brings additional value through planned deployment of its platform on Hyperliquid's layer-1 network, enabling tokenized real-world asset trading within the ecosystem. Anchorage would issue USDtb natively on Hyperliquid rather than requiring bridges from other chains, reducing complexity and counterparty risks for users.
The proposal competes against alternatives from Frax Finance, Agora, and Sky (formerly MakerDAO), each offering different backing mechanisms and governance structures. Ethena emphasized its track record managing over $23 billion in tokenized dollar assets as evidence of operational capability at the scale required for Hyperliquid's expanding derivatives markets.
Institutional Product Development
The partnerships drive specific product initiatives targeting institutional clients with requirements beyond retail user capabilities.
iUSDe represents Ethena's export of staked USDe (sUSDe) functionality to legacy finance. The product aims to provide asset managers, ETFs, prime brokers, private credit funds, and investment trusts with yield-bearing dollar exposure meeting traditional finance compliance standards. A December 2024 funding round raising $100 million from Franklin Templeton, Fidelity, Pantera, Polychain, and Dragonfly supports iUSDe development and institutional go-to-market efforts.
The product structure addresses several institutional requirements that prevent direct sUSDe adoption. Custody arrangements through federally supervised entities provide insurance coverage meeting institutional standards. Tax reporting follows traditional securities frameworks rather than requiring clients to navigate DeFi tax treatment complexity. Redemption mechanisms operate through familiar financial infrastructure rather than requiring blockchain wallet management.
Converge settlement layer provides infrastructure for institutions wanting to transact tokenized assets with blockchain efficiency while maintaining traditional finance safeguards. Co-developed with Securitize and BlackRock's tokenization partners, Converge enables real-time settlement of securities trades, automatic compliance checks, and integration with existing prime brokerage systems.
The platform's institutional focus distinguishes it from purely retail-oriented blockchain networks. Features like permissioned participation, qualified investor verification, and regulatory reporting tools address requirements that institutional clients cannot ignore regardless of technical benefits. This specialized infrastructure helps onboard clients unable to adopt public blockchain networks lacking traditional protections.
Comparing Institutional Approaches
Ethena's partnership strategy contrasts with competitors pursuing different paths toward institutional adoption.
Traditional stablecoins like USDC emphasize regulatory compliance and simple reserve structures over innovative yield mechanisms. Circle's transparent auditing and banking relationships provide institutional comfort, but yield generation remains zero for holders. Institutions seeking returns must deploy USDC into separate yield strategies rather than earning passively from stablecoin holdings.
MakerDAO's DAI prioritizes decentralization through its DAO governance structure and overcollateralized backing. While this approach appeals to users valuing censorship resistance, the capital inefficiency and complexity of vault management limits institutional appeal. Few traditional finance clients want to navigate DeFi liquidation mechanisms and collateral management when simpler alternatives exist.
Ethena's hybrid model combines institutional partnerships (BlackRock, Anchorage) with crypto-native innovation (delta-neutral hedging, derivatives yield). This structure provides traditional finance touchpoints institutions require while maintaining higher yields than purely fiat-backed alternatives. The dual-product strategy through USDe and USDtb lets institutions choose between higher yields with derivatives exposure or Treasury-backed stability, addressing different risk appetites within single relationships.
Strategic Value of Institutional Integration
The partnerships deliver concrete benefits beyond marketing credentials or investor funds.
Revenue diversification improves as USDtb's Treasury backing provides yield streams independent of crypto derivatives markets. When perpetual futures funding rates turn negative during bear markets, Treasury yields continue generating positive returns. This diversification reduces protocol vulnerability to sustained adverse crypto market conditions that could threaten purely derivatives-dependent models.
Regulatory navigation becomes manageable with partners holding necessary licenses and relationships with government authorities. Rather than Ethena independently interpreting evolving stablecoin regulations, partners like Anchorage and Securitize provide expertise and established compliance frameworks. This guidance helps Ethena maintain operations even as regulatory environments shift, particularly important as jurisdictions implement new digital asset rules.
Distribution scale expands through partners' existing client bases and operational infrastructure. BlackRock's relationships with institutional investors create natural onramps for USDtb adoption. YZi's connections across crypto exchanges facilitate USDe integrations. M2's wealth management network provides access to high-net-worth individuals seeking yield products. Each partnership opens distribution channels Ethena couldn't efficiently build independently.
Institutional Momentum and Future Expansion
The partnerships demonstrate institutional recognition that synthetic stablecoins can deliver value traditional finance struggles to provide, primarily through higher yields while maintaining dollar stability. As more institutions seek exposure to crypto yields without direct cryptocurrency volatility, protocols offering structured approaches with proper oversight gain appeal.
Ethena's positioning through these relationships creates potential for continued institutional adoption as digital asset markets mature. The combination of crypto-native innovation with traditional finance guardrails addresses concerns that prevented earlier institutional participation in DeFi protocols, potentially unlocking significant capital flows as regulatory frameworks clarify.
For traders seeking exposure to this institutional adoption trend, trading ENA on LeveX provides participation in the protocol's growth. ENA futures enable hedging strategies as institutional partnerships develop. Explore our Crypto in a Minute series for insights into protocols bridging traditional and decentralized finance.