21Shares has expanded its crypto offering with the launch of the world’s first US dollar yield exchange-traded product (ETP) collateralised by bitcoin and ethereum.
The 21Shares USD Yield ETP (USDY) – listed on the SIX Swiss Exchange – takes US dollars and lends them to counterparties against a minimum of 110% collateral in bitcoin and ethereum market-to-market daily.
USDY looks to generate a dollar-denominated yield of 5% and has a total expense ratio of 0.30%.
21Shares said the returns generated are added directly to the net asset value of the ETP.
The crypto specialist said the product is designed to tackle more than a decade of historically low-interest rates and high asset values along with a highly inflationary environment.
Ophelia Snyder, president and co-founder of 21Shares, said: “We’re in an environment where interest rates are negative and we are excited to offer a first of its kind product that can provide meaningful risk-adjusted yield.
“USDY does this by tapping into the crypto capital markets where rates are higher while also providing liquidity.
“With USDY, we are introducing a financial product fully dedicated to providing a yield and minimizing risk.”
It comes after 21Shares launched the first spot bitcoin and ethereum ETFs in Australia earlier this month, in partnership with ETFS Securities.
The issuer also launched a Layer 1 and decentralized finance (Defi) infrastructure ETPs in May with TERs of 2.50%, offering investors exposure to the five largest blockchains that form the foundation of the Defi universe.