Bloomberg writes, "Crypto Startup Ondo Unveils Stablecoin Alternative Backed by Money-​Market Funds." They tell us, "Ondo Finance Inc., a decentralized platform set up by a pair of former Goldman Sachs Group Inc. associates, is launching a new product that uses money-​market funds investing in US government securities to create a yield-​generating stablecoin alternative. Investors in the tokenized money-​market fund will receive a digital coin called OMMF, the company said in a blog post Thursday. The details of the fund structure weren'​t disclosed, but Ondo said that it will invest only in low-​risk money market funds, including those holding US government securities." Justin Schmidt, president and COO, comments to Bloomberg, "First generation stablecoins ... were created when interest rates were near zero, so designing them to be able to pass on yield was not a focus.... By tokenizing money-​market funds we are able to deliver the price stability and on-​chain utility of stablecoins while providing superior investor protections and passing on yield to holders." The piece adds, "Stablecoins, tokens that are designed to hold a steady value in contrast to the price volatility seen in Bitcoin and other crypto assets, have been at the center of some of the recent market shakeups in crypto. USD Coin, one of the most popular stablecoins, saw its value drop below its intended one dollar peg in early March after its issuer Circle Internet Financial Ltd. announced its exposure to failed Silicon Valley Bank. And in February, New York'​s Department of Financial Services directed Paxos Trust Co. to stop issuing new tokens of BUSD, a stablecoin branded under crypto exchange Binance." See also, WSJ'​s "Bank Failures Rattle Market for Short-​Term Lending" and "Banks Are Finally Facing Pressure to Pay Depositors More."

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