Paxos and FRAX Finance Compete to Launch Hyperliquid’s USDH Stablecoin

Paxos and FRAX Finance have submitted competing proposals to launch Hyperliquid’s USDH stablecoin, each presenting distinct operational models. Paxos emphasizes regulatory compliance and institutional reach, leveraging its experience with BUSD, which once surpassed $25 billion in circulation.

The firm plans to back USDH with high-quality reserves, including US Treasuries and repos, while directing 95% of reserve returns to repurchase HYPE tokens. These tokens will be distributed to validators, protocols, and users, reinforcing Hyperliquid’s builder-code reward system.

Paxos also intends to list HYPE across its brokerage network, which includes platforms like PayPal, Venmo, and MercadoLibre. "We bring a level of trustworthiness to Hyperliquid to help reach institutions and 10x the entire ecosystem," said Max Fantle, a Paxos executive.