Galaxy Digital added $100 million in Sky's sUSDS to its treasury and approved the stablecoin savings token as collateral for institutional lending, the firms said in an announcement on September 23.
The purchase and collateral approval deepen a partnership between Galaxy and Sky Protocol that extends beyond digital asset holdings into the mechanics of institutional borrowing. Sky's sUSDS token allows holders to earn yield on USDS, the stablecoin native to Sky's ecosystem. Borrowers can now pledge sUSDS directly as collateral in loans from Galaxy rather than converting it back to USDS or other assets.
Galaxy Digital is one of the largest institutional crypto asset managers in the United States, with billions in assets under management. The firm has expanded aggressively into lending over the past two years, offering collateralized loans to corporate and institutional counterparties. Sky Protocol, launched from the codebase of MakerDAO in 2024, has built its ecosystem around USDS and sUSDS as core savings mechanisms for institutions seeking yield-bearing alternatives to plain stablecoins.
The $100 million sUSDS purchase represents a material commitment to Sky's savings layer. Galaxy's authorization of sUSDS as institutional collateral removes a friction point for clients who hold the token and need to borrow against it. Rather than converting sUSDS back to USDS or other assets, borrowers can pledge the savings token directly.
Galaxy also acquired Sky token, the protocol's governance asset, according to the announcement, though the firm did not disclose the acquisition size. Sky token holders can vote on protocol changes and earn a portion of fees generated by the ecosystem. The purchase gives Galaxy a stake in Sky's governance.
The partnership between the two firms comes as institutional demand for yield-bearing stablecoins has grown. Traditional money market funds offer between 4 and 5 percent annual returns; sUSDS has offered higher rates in some periods. Galaxy's institutional clients are likely seeking allocations to these products as part of treasury management or collateral strategies.
Galaxy's treasury moves and the collateral approval extend its commitment across both asset holdings and lending mechanics. If Galaxy's institutional clients do not increase their use of sUSDS as collateral over the next quarter, the two firms may face questions about whether the product truly solved a market problem or addressed demand that existed only on paper.
