Dollar-Backed Stablecoin UPUSD Announced By Universal Protocol Alliancebr>
The Universal Protocol Alliance is launching a stablecoin that is collateralized 1-to-1 with US dollars.
Formed earlier this year, the Universal Protocol Alliance is a coalition of cryptocurrency companies and blockchain pioneers, including Uphold, Brave Software, Cred, Blockchain at Berkeley and FBG Capital. It seeks to accelerate the adoption of blockchain as a mainstream financial technology by making digital assets more accessible, secure and convenient to own.
The new stablecoin, called the Universal Dollar (UPUSD), is a fully-transparent, digital asset that is collateralized 1-to-1 with US dollars to be held at US domiciled, FDIC-insured banks. UPUSD will allow investors around the globe to access higher yields on deposits and enable holders to access flexible loans with single-digit rates of interest. UPUSD is underpinned by reserve management developed by Uphold, a financial services platform that enables users to convert deposits to their account via bank account, credit card, and cryptocurrencies into reserve-backed currencies and commodities.
“Worldwide, over 2.5 billion people with bank accounts are likely to be interested in cheaper credit and a higher yield on their deposits,” said JP Thieriot, CEO of Uphold. “This isn’t about imagined ‘utility’ for a rarified use case. The Universal Dollar should have broad appeal to a wide array of people and, for some in developing economies, could be life changing. Without thousands of employees, miles of high-rent real estate and the baggage of legacy systems, companies in our industry have a big structural advantage over traditional banks. This advantage has to accrue to the benefit of the mass market, or our industry will remain the exclusive domain of technophiles and speculators.”
The Alliance said UPUSD will introduce user safeguards and benefits, such as a fully reserved, built-in loss recovery and optional custody of private keys; inheritability feature that allows users to nominate a beneficiary who can “call” the asset on account dormancy; and a “detachable” wallet that reduces exchange risk. It will also offer flexible borrowing on competitive terms, secured by the value of digital assets, and users can earn up to five percent annually on the value of digital holdings.
“Traditionally, you’ve had to own a home to have access to cheap credit products, such as the American ‘HELOC’,” said Dan Schatt, Co-Founder and President of Cred. “Now, a new generation can access similarly convenient credit without such a high bar and through simple ownership of digital assets.”