Boundary Labs raises $2 million to build verifiable stablecoin USBD for institutional market

Galaxy-backed Boundary Labs has announced plans to launch an on-chain verifiable stablecoin, USBD, for the institutional market.

The announcement on Monday comes five months after the stablecoin firm raised $2 million in a pre-seed funding round led by Galaxy Ventures, with participation from First Block Capital and BlackWood.

Galaxy-backed Boundary to launch on-chain verifiable stablecoin

The startup, led by former Deutsche Bank executive Matthew Mezger, said USBD will operate on a “continuous” on-chain verifiability of reserves. In contrast, major stablecoins like USDT and USDC are largely trust-based on off-chain attestations, Mezger points out. 

“This shift provides the structural resilience and auditability required for safe, permissionless staking and institutional fiduciary use cases, effectively transforming stablecoins into robust financial infrastructure,” Mezger said.

USBD is strictly aimed at asset managers, hedge funds, and family offices rather than retail users. Per the report, users will need to complete know-your-customer and know-your-business verification to access the stablecoin. 

The token itself will not be yield-bearing. However, Mezger said that Boundary will offer a separate staked token, sUSBD, that distributes protocol income to eligible institutional holders.

Meanwhile, Boundary is also planning a private placement campaign to achieve $100 million of total value locked this year.

Despite leading the pre-seed round in 2025, neither Galaxy nor the investors in that round hold any board, advisory, or observer seats at the stablecoin firm, according to the report. 

The GENIUS Act has formalized reserve requirements for USD stablecoins

The news comes as regulators globally push stablecoin issuers toward greater transparency. 

The stablecoin market now exceeds $300 billion, according to Galaxy, and the recently enacted GENIUS Act in the United States has formalized reserve requirements for dollar-denominated stablecoins. But some organizations oppose the draft rules being carved in the Act.

Earlier this month, BlackRock submitted a 17-page comment letter, opposing the Office of the Comptroller of the Currency’s draft rules for the GENIUS Act. The asset manager argued that the OCC’s 20% cap on tokenized assets could choke its BUIDL fund and similar innovations, Cryptopolitan reported. 

In April, the Federal Deposit Insurance Corporation had also proposed rules to establish a regulatory framework for stablecoin issuers in line with the GENIUS Act. The rules would “clarify deposit insurance coverage of deposits that serve as reserve assets,” said Chantal Hernandez, counsel at the FDIC.