Hyperliquid’s USDH Stablecoin Faces Multiple Issuer Proposals Amid Competition
Hyperliquid has announced plans to launch a USD-pegged stablecoin under the ticker USDH, aiming for a compliant, ecosystem-aligned digital currency. The company invited proposals for USDH issuance, sparking a competitive race among prominent crypto firms and payment processors.
Stripe’s Proposal Under Scrutiny
The first proposal came from Native Markets, which envisions Stripe’s stablecoin payment processor, Bridge, as the issuer of USDH. This bid promises regulatory compliance and a contribution of reserve proceeds to Hyperliquid’s Assistance Fund treasury.
However, Agora co-founder and CEO Nick Van Eck publicly challenged the Stripe-linked proposal, citing potential conflicts of interest. Van Eck criticized Stripe’s limited financial infrastructure and highlighted Stripe’s own blockchain initiative, Tempo, as a possible competing interest. He questioned the long-term alignment of Hyperliquid’s stablecoin issuance with Stripe’s broader ecosystem ambitions.
MoonPay and Agora Form Coalition Against Stripe
On Sunday, MoonPay’s president and board member Keyth Grossman joined forces with Agora, opposing the Stripe-backed proposal. MoonPay pledged to provide regulated payment rails and emphasized the need for scale, credibility, and alignment in USDH issuance, dismissing the Stripe approach as misaligned with Hyperliquid’s interests.
Rob Hadick, general partner at Dragonfly.xyz, endorsed this coalition’s proposal as the strongest contender for USDH issuance, citing the combined expertise and regulatory commitment of the group.
Additional Competing Proposals from Paxos and Frax
Besides the Stripe and coalition bids, Paxos submitted a proposal offering to use a portion of USDH reserve interest to repurchase Hyperliquid’s native token, HYPE, redistributing it to stakeholders including users and validators.
Frax blockchain also proposed issuing USDH backed by its frxUSD stablecoin, pledging to return all earnings from USDH to the community, a unique approach emphasizing decentralized benefits.
Stablecoin Sector Gaining Momentum Amid Regulatory Developments
This competitive environment reflects broader trends in stablecoin adoption and regulation. Financial institutions such as HSBC and ICBC are reportedly seeking stablecoin licenses in Hong Kong following the introduction of a new regulatory framework. Kazakhstan has authorized stablecoin payments for licensing fees, while Wyoming prepares to launch a government-backed stablecoin named Frontier Stable Token (FRNT).
Additionally, companies like 1Money are expanding stablecoin payment infrastructure by securing numerous US money transmitter licenses. Regulatory scrutiny remains high, with European Central Bank officials urging the EU to close regulatory gaps to prevent capital flight and protect the euro’s financial ecosystem.
As stablecoins become central to global digital finance, the outcome of Hyperliquid’s USDH issuance contest may signal broader shifts in how stablecoins are governed, issued, and integrated across financial platforms.
FinOracleAI — Market View
The competition among established crypto firms and payment processors to issue Hyperliquid’s USDH stablecoin highlights the sector’s increasing fragmentation and regulatory sensitivity. While the involvement of players like MoonPay and Paxos adds credibility, the concerns raised about Stripe’s conflicts of interest could influence market trust and adoption.
Investors should monitor which issuer gains regulatory approval and ecosystem support, as this will impact USDH’s acceptance and liquidity. The stablecoin’s design—particularly reserve management and community benefit distribution—will be crucial in shaping its competitive positioning.
Risks include regulatory delays and potential conflicts arising from issuer ecosystem overlaps. Market participants should watch for formal issuer selection announcements and regulatory feedback in the coming weeks.
Impact: neutral
