As United States regulators increasingly scrutinize stablecoins, the community continues to propose new ideas for stablecoins independent of the US dollar.
Arthur Hayes, co-founder and former CEO of cryptocurrency exchange BitMEX, has proposed creating a new stablecoin whose value is tied to the sum of $1 worth of Bitcoin (BTC) and an inverse perpetual swap of BTC to USD. He outlined the idea of the potential Satoshi Nakamoto Dollar (NUSD) or NakaDollar in a blog post titled “Dust on Crust” on March 8th.
Unlike major reserve-backed USD-pegged stablecoins like Tether (USDT) and USD Coin (USDC), the proposed NakaDollar will not depend on USD reserves, but solely on derivatives exchanges listing liquid inverse perpetual swaps, he said hayes
The proposed stablecoin would be explicitly based on a series of short BTC positions and USD inverse perpetual swaps and its 1:1 pegging to the US dollar via mathematical transactions between the new decentralized autonomous organization (DAO) – NakaDAO – authorized participants and derivatives exchanges.
The process of creating the NakaDollar stablecoin will be completely free of USD movements, which will require the services of banks, Hayes said. He nevertheless noted that the proposed NUSD stablecoin would not be decentralized, adding:
“The weak points in the NakaDollar solution would be centralized crypto derivatives exchanges. I excluded decentralized derivatives exchanges because they are nowhere near as liquid as their centralized counterparts […]”
The news comes amid the owner of Silvergate Bank, a major crypto-focused bank in the United States, ceasing operations and liquidating the business amid the ongoing market downturn. The shutdown came quickly after the New York Treasury Department abruptly ordered Paxos Trust Company to halt issuance of Binance USD (BUSD), one of the largest U.S. dollar-pegged stablecoins on the market. As previously reported, Paxos held deposits with several banks including Silvergate and Signature.
Relative:Stablecoins and Ether will “be commodities,” CFTC Chairman affirms
Hayes isn’t the only one considering USD-agnostic stablecoins amid continued pressure from regulators. In February, Binance CEO Changpeng Zhao hinted that the cryptocurrency industry is likely to switch to other fiat currencies as bases for stablecoins, including the euro, yen or Singapore dollar.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.