Former Consensys employee, Jack Jia, who is now the co-CEO of Stable.com, has launched a new stablecoin called USD3. Despite the current lack of regulatory framework and market uncertainty, Jia aims to create a “payments-first” stablecoin that is backed 1:1 by the U.S. dollar. The goal of USD3 is to serve as an extension of the U.S. dollar for global commerce and Web3. Jia made the announcement at the Consensus 2024 event in Austin, Texas.
USD3 is built on Ethereum, Polygon, Avalanche, and Linea. Stablecoins are digital assets designed to maintain a stable value by being pegged to a reserve asset, such as a fiat currency like the U.S. dollar or a commodity like gold, or even other cryptocurrencies. Crypto traders often use stablecoins for trading, borrowing, and lending in the decentralized finance (DeFi) space, while others use them to access the stability of the dollar in countries where it is not easily obtainable.
The main purpose of stablecoins is to combine the advantages of digital currencies, such as fast transactions and security, with the stability of traditional currencies. Jia stated in a press release, “We have learned from the mistakes of previous players and know what they lack today – our vision for USD3 is future-proof. Our plan is to achieve mass adoption of our stablecoin and establish it as the foundation for a new global payments system.”
One of the most well-known stablecoins is Tether (USDT), which is widely used in the crypto market and is pegged to the value of the U.S. dollar, maintaining a 1:1 value ratio. It is commonly used for trading, transfers, and as a store of value within the crypto ecosystem. Another notable stablecoin is the USD Coin (USDC).
There has been ongoing discussion about the safety of stablecoins, particularly Tether’s USDT and USD Coin USDC, and which one is more secure.
Stablecoin regulation has become a topic of interest. In the U.S., the Lummis-Gillibrand Payment Stablecoin Act was introduced on April 17 to provide regulatory clarity for the stablecoin market and encourage wider adoption. S&P Global, a U.S. credit ratings firm, recently stated that changes in regulations under this act could lead to increased adoption of stablecoins, as the regulatory framework would enhance confidence.
In Europe, the Markets in Crypto Assets Regulation (MiCA) emphasizes that issuers of pegged currencies must comply with regulations. However, the lack of clarity has resulted in some exchanges delisting Tether’s USDT. For example, OKX discontinued support for USDT stablecoin for users in the European Union and the European Economic Area in March.
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