Sonic Labs Launches USSD Stablecoin Backed by U.S. Treasury Bills

The team behind Layer 1 blockchain Sonic has rolled out a native dollar-pegged stablecoin called US Sonic Dollar (USSD). The asset is collateralized 1:1 by U.S. Treasury bills issued through BlackRock, Superstate, and WisdomTree, and is built on Frax Finance's frxUSD infrastructure.

"Introducing USSD, the US Sonic Dollar. A network-native USD stablecoin built to be the stable liquidity layer across the Sonic ecosystem and a core piece of our vertical integration initiative. Built on @fraxfinance's infrastructure. Backed 1:1 by U.S. Treasury bills from…" — Sonic (@SonicLabs), original post

Why This Matters

The launch of USSD reflects a growing trend toward "institutional-grade" stablecoins anchored to real-world financial instruments. Collateralization through Treasury bills from major asset managers adds transparency and credibility. For the Sonic network itself, a native stablecoin represents a critical step toward building a self-sufficient financial infrastructure.

The developers emphasized that stablecoins serve as the "money layer" of onchain finance. In their view, for Sonic to become more than just a deployment platform for applications, it needs a reliable dollar primitive around which the entire network can coordinate.

How USSD Works

USSD is designed to serve as the foundational liquidity layer across the Sonic ecosystem. The token complies with the Genius Act and forms part of Sonic's broader vertical integration strategy.

Revenue generated from collateral assets is intended to fund liquidity support, buybacks, and other mechanisms as the network scales.

Minting occurs by depositing supported assets — including USDC, USDT, PYUSD, USDB, BUIDL, USTB, WTGXX, and others — at a 1:1 ratio through smart contracts on Sonic. There are no minting fees.

Redemption is handled via smart contracts on the user's chosen network, enabling:

• Cross-chain liquidity transfers;
• Settlement and treasury operations;
• Position rebalancing across ecosystems.

For networks supporting CCTP, direct conversion routes between USSD and major dollar stablecoins are available. In the future, qualified users will be able to redeem USSD directly for U.S. dollars, subject to KYC/AML compliance and issuer approval.

Current Market Metrics

At the time of writing, USSD's market capitalization stands at $550,785 with 550,653 tokens in circulation. Trading volume has reached just $2,126. The total stablecoin sector is valued at $314 billion, with USDT commanding a 58.6% market share.

Stablecoin Liquidity Shows Signs of Recovery

Alongside the USSD launch, CryptoQuant analyst CryptoMe highlighted a broader recovery in stablecoin liquidity.

"Stablecoin Liquidity Is Rising Again! Is It Flowing Into Crypto Markets? Even though these data still show weakness for now, they are promising for a long-term investment view." — CryptoQuant.com (@cryptoquant_com), original post

In December, the Federal Reserve wound down its quantitative tightening (QT) program and shifted to purchasing Treasury bills. Over the following three and a half months, the Fed expanded its balance sheet in line with prior guidance. Starting in mid-February, the combined market capitalization of USDT and USDC began climbing again, recovering from the December decline.

Stablecoin issuers typically mint new tokens in response to genuine demand, making supply expansion a common proxy for capital inflows. However, there are exceptions — a company may mint stablecoins and hold them in its own reserves rather than releasing them into circulation.

To assess actual inflows, CryptoMe examined exchange-level data. The Exchange Netflow metric shows an overall downward trend, but inflows have begun increasing in recent weeks. Exchange Reserve figures for stablecoins also trend downward, though a modest uptick has emerged.

According to the analyst, the Fed is expanding the dollar supply, and stablecoin liquidity is growing in tandem. Some of these funds are reaching the market, but the inflow remains modest, leaving room for short-term volatility and pullbacks. Nevertheless, the current signals appear encouraging for long-term investors.

Earlier reports indicated that net stablecoin inflows surged 414.5% in early March, reaching $1.7 billion in a single week.