tl;dr
A group of experienced US derivatives and FX traders, led by Michael Ashton, is launching USDi, a stablecoin designed to adjust its value in line with US inflation. Unlike traditional stablecoins pegged to the dollar, USDi’s price will fluctuate based on Consumer Price Index (CPI) data and Treasury ...
USDi, a new stablecoin developed by veteran US derivatives and FX traders led by Michael Ashton, presents an innovative approach to protecting purchasing power by adjusting its value based on inflation data. Unlike traditional stablecoins pegged directly to the US dollar, USDi’s price will fluctuate in line with Consumer Price Index (CPI) measurements and the performance of Treasury Inflation-Protected Securities (TIPS), aiming to hedge against inflation risk effectively.
The stablecoin’s value will be regularly updated starting December 2024, reflecting cumulative inflation since that date. Daily minting and burning of tokens will be managed by USDi Partners LLC in accordance with inflation metrics and a modest transaction fee, ensuring an inflation-linked alternative to holding cash. Initially, USDi will be available exclusively to accredited investors.
In a market crowded with numerous stablecoins, USDi’s success hinges on gaining early traction amid increasingly favorable US regulatory conditions encouraging innovation in crypto assets. By providing an inflation-hedged digital asset, USDi could demonstrate practical crypto applications beyond traditional use cases, potentially filling a niche for “inflation-linked cash” that founder Michael Ashton describes as the “end of the risk line” for holding cash in an inflationary environment.
This venture reflects broader trends where investors seek alternatives that maintain purchasing power amid rising inflation, with crypto assets increasingly serving as hedges. While USDi’s model mirrors government-backed inflation protection mechanisms like TIPS, it leverages blockchain technology to offer daily adjustments and enhanced liquidity. The market will watch closely to see if USDi establishes itself as a viable and trusted inflation-linked stablecoin in the evolving crypto landscape.