Arthur Hayes, the former CEO and co-founder of BitMEX, has floated the idea of a stablecoin — the Satoshi Nakamoto Dollar (NUSD), which would be tied to the value of Bitcoin and an inverse swap of BTC versus USD. The objective of the proposed stablecoin is to be entirely detached from the US dollar and its banking services, said media reports.
Unlike major reserve-backed stablecoins such as Tether and USD Coin, NakaDollar won’t rely on any USD reserves. Instead, it will be based on USD inverse perpetual swaps and short BTC positions. It will keep a 1:1 peg to the US dollar by performing mathematical operations within the newly established decentralized autonomous organization (DAO) known as NakaDAO, approved participants and derivatives returns.
Hayes emphasizes that the creation of the NakaDollar would not involve any USD movements that require the assistance of banks. Nonetheless, he admits that centralized crypto derivatives exchanges are the weak points of the NakaDollar solution, and the suggested stablecoin would not be decentralized.
The proposal arrives in the midst of rising regulatory scrutiny of stablecoins, mainly those backed by the US dollar. The owner of Silvergate Bank has closed down its operations and liquidated its business due to the ongoing market downfall. The New York Panel of Financial Services prompted the shutdown, which instructed the Paxos Trust Company to cease issuing Binance USD (BUSD), one of the biggest U.S. dollar-pegged stablecoins in the market.
Apart from Hayes, there are others considering stablecoins that are not tied to the USD.
In February, Changpeng Zhao, the CEO of Binance, proposed that the crypto industry might adopt different fiat currencies, such as the euro, yen, or Singapore dollars, as a basis for stablecoins.
The proposal of the Satoshi Nakamoto Dollar highlights the increasing interest in stablecoins independent of the US dollar, which could offer more stability and protection against inflation. However, it also emphasizes the challenges and risks of creating a stablecoin entirely separate from fiat currencies and the traditional banking system.
