According to the announcement, USDH will be fully compliant with the GENIUS Act (US) and MiCA (EU). Its reserves will consist of high-quality assets such as US Treasury bonds.

Paxos plans to allocate 95% of the interest income generated from the stablecoin’s reserves to buy back HYPE tokens, which will then be redistributed among users, ecosystem projects, and Hyperliquid partners

The stablecoin will be deployed on HyperEVM and HyperCore networks.

Paxos called the initiative a priority and registered a new entity, Paxos Labs, to oversee the project. As part of the effort, the structure has already acquired Molecular Labs, an infrastructure provider for Hyperliquid that developed the LHYPE and WHLP primitives powering the ecosystem.

The launch of USDH is intended to make Hyperliquid more attractive to institutional investors and mainstream fintech platforms, moving it beyond a “niche environment for crypto enthusiasts.”

Paxos highlighted that it has previously helped issue and scale several regulated stablecoins, including Binance USD and PayPal USD. The company will leverage its global distribution network — including centralized exchanges, custodians, and DeFi protocols — and support integration of USDH with more than 70 partners worldwide.

The initiative is subject to approval by the Hyperliquid community.