The crypto community members are coming up with new suggestions for stablecoins following regulatory scrutiny. Arthur Hayes BitMEX co-founder has proposed a stablecoin that aims to be entirely free from any movements of USD.
A new stablecoin with a value indexed to $1 worth of Bitcoin and one inverse perpetual swap of BTC against USD has been proposed by Arthur Hayes, co-founder and former CEO of the BitMEX cryptocurrency exchange. In a March 8 blog post titled “Dust on Crust,” he described the concept of the future Satoshi Nakamoto Dollar (NUSD), also known as the NakaDollar.
The proposed NakaDollar, in contrast to popular reserve-backed USD stablecoins like Tether (USDT) and USD Coin, will only rely on derivatives exchanges that feature liquid inverse perpetual swaps, according to Hayes.
The proposed stablecoin is expected to be built specifically around a set of short BTC positions and USD inverse perpetual swaps, maintaining its 1:1 peg to the USD through mathematical exchanges between the new decentralized autonomous organization (DAO), NakaDAO, authorized participants (AP), and derivatives exchanges.
According to Hayes, the NakaDollar stablecoin creation procedure won’t involve any USD transactions that call for the assistance of banks. The planned NUSD stablecoin will not be really decentralized, he continued, adding:
“The points of failure in the NakaDollar solution would be centralized crypto derivatives exchanges. I excluded decentralized derivative exchanges because they are nowhere near as liquid as their centralized counterparts […]”
In light of the ongoing market collapse, the owner of Silvergate Bank, a significant cryptocurrency-enabled bank in the United States, has announced plans to liquidate the bank’s activities.
The suspension came shortly after Paxos Trust was abruptly told to stop issuing BUSD, one of the biggest USD stablecoins on the market, by the New York Department of Financial Services. Paxos had deposits in several banks, including Silvergate and the Signature crypto bank, as was previously reported.
In light of the increasing push from regulators, Hayes is not the only one who is thinking about USD-independent stablecoins. Changpeng Zhao, the CEO of Binance, predicted in February that the stablecoin market would likely shift to other fiat currencies, such as the euro, yen, or Singapore dollars, as a base.
