Galaxy Digital buys $100 million in sUSDS stablecoin

Galaxy Digital is adding $100 million in sUSDS, the interest-bearing stablecoin from Sky Protocol, to its corporate reserves. At the same time, the company will accept sUSDS as collateral within its institutional trading platform. Galaxy says it is thereby one of the first publicly listed companies to hold sUSDS on its balance sheet.

In brief:

• Galaxy Digital buys $100 million in sUSDS via its own balance sheet
• sUSDS is accepted as collateral within Galaxy’s institutional platform
• Galaxy also buys an undisclosed amount of SKY tokens

Purchase financed from its own balance sheet

Galaxy is financing the purchase from its own funds. Max Bareiss, head of the lending division, tells The Block that as of 30 June the company held nearly $2.5 billion in cash and stablecoins.

In addition to the sUSDS purchase, Galaxy is also acquiring an undisclosed amount of SKY tokens, the native token of Sky Protocol. Greg Feibus, global head of capital markets at the Sky Frontier Foundation, says that holding SKY reflects the breadth of the collaboration, which covers both the corporate reserves and the lending activities. According to Feibus, Galaxy sees the protocol’s ability to generate income under varying market conditions as a central part of the investment rationale.

Clients continue to receive interest while lending

Galaxy’s institutional trading platform serves more than 1,600 counterparties and has an average outstanding loan book of $1.4 billion. Clients can now deploy sUSDS as collateral for loans, while at the same time continuing to receive the Sky Savings Rate on their full position for the duration of the loan.

In addition, the two parties are discussing an expansion of an existing $500 million financing facility. This news follows a similar move earlier this year, when Binance invested $100 million in Circle and expanded the collaboration around USDC, which shows that large crypto companies are increasingly taking strategic positions in stablecoin issuers.