Anchorage Digital Pursues More Efficient Institutional Stablecoin Liquidity

Anchorage Digital is exploring a stablecoin issuance model designed to offer institutional stablecoin issuers better liquidity, capital efficiency and security.

This Cashless Reserves model would rely on just-in-time liquidity to meet redemption demand, thereby optimizing treasury management and yield opportunities, the company said in a Tuesday (May 5) press release emailed to PYMNTS.

Instead of static cash buffers, this model would hold reserves on Solana in yield-bearing, low-risk, tokenized instruments that can generate on-demand liquidity, according to the release.

Anchorage Digital would issue and manage this model’s stablecoins on behalf of institutional partners, with a third party providing the liquidity infrastructure.

The company is working with J.P. Morgan Asset Management to explore a potential tokenized instrument solution that could be used by the third party.

“Stablecoins are becoming core financial infrastructure, but the underlying financial system needs to evolve to meet the needs from digital assets,” Anchorage Digital Co-Founder and CEO Nathan McCauley said in the release. “By leveraging high-performance networks like Solana, and exploring a relationship with J.P. Morgan Asset Management, we’re giving our stablecoin partners and their clients a way to operate with greater efficiency, stronger liquidity and a more robust reserve model, without adding complexity for end users.”

Solana Foundation Head of Institutional Growth Nick Ducoff said in the release that Solana’s infrastructure makes capital movement faster and more efficient and brings financial workflows on-chain.

“Extending proven financial mechanisms like intraday liquidity into an always-on environment is a natural next step for institutional adoption,” Ducoff said.

Anchorage Digital aims to become the infrastructure underneath crypto banks, and wants all banks to become crypto banks, McCauley told PYMNTS CEO Karen Webster in an interview posted Thursday (April 30).

Today, the company is the regulated issuer behind Tether’s U.S. stablecoin, as well as Ethena’s and Western Union’s. It is also the custody rail behind BlackRock’s BUIDL. In each case Anchorage Digital serves as a regulated counterparty for institutions that don’t want to become a crypto bank themselves.

“Whether that’s around stablecoins, whether that’s custody and trading as a back end, whether that’s building their business on top of ours, we are here to be the enabling infrastructure bank for the industry,” McCauley said.