Former employees of JP Morgan, Intel, and TrustToken have come together to start a new firm and have released a new stable coin called USD Digital (USDD) token, backed by US Dollar. However, the new stable coin has a twist to its business model, where the institutions using the token would share the revenue.
The stablecoin has been targeted at institutions, exchanges, traders, and OTC desk who are in need of a stablecoin product but can’t develop their own. The business model would be based on 50-50 incentive sharing to propel its adoption. The creators believed that the ethereum based stable coin would provide great transparency to users.
Joe Vellanikaran, CEO of Global Currency Organization said that the coin will provide a win-win situation for adoptors, as it provides all the functionalities of a stablecoin along with the revenue sharing.
Vellanikaran started working on the stablecoin as a general manager and soon realized the potential that these coins provided to investors and institutions alike. Vellanikaran explained the importance of stablecoins saying,
“Let’s say you’re a Japanese student living in the U.S. and you want your parents to send you funds. With the current process, you’d either need a U.S. bank account or be subjected to long delays and conversion fees. With our stablecoin, you should be able to receive your funds in a matter of days.”
He believed that the era of blockchain-based currencies would become mainstream in 10-20 years, however, in order to push for that adoption, institutions need to take a big part in it. He explained,
“For a company to emerge and help move all these dollars to the blockchain, we really have to open it up to the partners. That’s what we think we can do through revenue sharing.”
Stablecoins to Bcome Mainstream in the Coming Years?
The use of stablecoins is currently most prominent on crypto exchanges where it is required for providing liquidity. However, as the crypto space is gaining mainstream traction many institutions have started showing great interest in this form of digital currency. JP Morgan was among the first institution to have announced its plans of launching a digital currency of their own, which did not materialize.
Similarly, Goldman Sacha has shown similar interest, ING’s chief economist aimed at central banks around the globe would start working on their own stable coin backed by the government.
Currently, there are only a handful of stable coins in the crypto space, out of that handful, 90% of the market is captured by Tether’s USDT. Thus, the newly launched USDD with its innovative revenue distribution for use could bring in the much-needed variety in the stable coin sector.
This article is Originally posted on CoinCentral.com
Author: James W