Jack Jia, formerly of Consensys and now co-CEO of Stable.com, has introduced USD3, a novel stablecoin with a “payments-first” approach, despite the current absence of a regulatory framework and market uncertainties.
USD3 is designed as a 1:1 backed stablecoin, aiming to serve as an extension of the U.S. dollar for global commerce and Web3. Jia unveiled the stablecoin’s launch during the ongoing Consensus 2024 event in Austin, Texas, running from May 28 to 31.
This stablecoin, USD3, is built on Ethereum, Polygon, Avalanche, and Linea. Stablecoins, a type of digital asset, maintain a stable value by being tied to a reserve asset, such as the U.S. dollar in this instance, or other commodities like gold, or even cryptocurrencies.
Traders in the crypto space frequently employ stablecoins for trading, borrowing, and lending within decentralized finance (DeFi). They also offer a means for individuals in regions without access to dollars to gain stability.
Stablecoins serve to combine the advantages of digital currencies—speedy transactions and security—with the stability of traditional currencies.
“We’ve taken heed of past shortcomings and understand their current deficiencies—our vision for USD3 is future-proof,” stated Jia in a press release. “Our plan is to achieve widespread adoption of our stablecoin and establish it as the foundation for a new global payment ecosystem,” Jia added.
Well-Known Stablecoins
Tether (USDT) stands out as one of the most prominent stablecoins in the crypto market. It’s widely utilized and pegged to the value of the US dollar, striving to uphold a 1:1 value ratio with it. Its primary functions include trading, transfers, and serving as a store of value within the crypto ecosystem. Another noteworthy stablecoin is the USD Coin (USDC).
There’s ongoing debate regarding the safety of stablecoins, particularly Tether’s USDT and USD Coin USDC, with discussions delving into which one provides a higher level of security.
Stablecoin Regulation
The Lummis-Gillibrand Payment Stablecoin Act, introduced on April 17, aims to bring regulatory clarity to the stablecoin market in the U.S., potentially fostering broader adoption. Recent statements from S&P Global suggest that changes in regulations under this act could significantly boost the adoption of U.S. stablecoins by instilling confidence through a clearer regulatory framework.
In Europe, the Markets in Crypto Assets Regulation (MiCA) underscores the importance of stablecoin issuers complying with regulations. However, the lack of clarity has led some exchanges to remove Tether’s USDT from their listings. For instance, OKX ceased support for Tether’s USDT stablecoin for users residing in the European Union and the European Economic Area in March.
