At the San Francisco Blockchain Week, the launch of a USD-backed stable currency “Universal Dollar” (UPUSD) was announced by Universal Protocol Alliance, a conglomeration of Uphold, Cred, Blockchain at Berkeley and FBG Capital.
The UPUSD is a stablecoin similar to Tether or USDT, which is backed 1-to-1 by US dollar. Stablecoins are backed by either fiat currency such as USD, or assets that have intrinsic value such as gold, and are global digital assets that are decentralized. The creation of stablecoins was to mitigate the volatility that is found with other cryptocurrency.
The new UPUSD stablecoin will also be pegged 1-to-1 with the US dollar. Due to being collateralized with the USD, it will provide higher yields on deposits and flexible loans. This new coin comes as an edition to the services provided by the Universal Protocol Alliance, as the also have Brave in their repertoire. Using the Basic Attention Token (BAT), the web browser Brave allows user to monetize their creative content and personal data.
This type of coin is gaining prominence, seeing a new stablecoin be launched by GMO, a Japanese Internet services company, pegging their new coin against the YEN. The stablecoin is dubbed “GMO Japanese Yen” (GJY). British exchange, London Block Exchange, has also revealed plans to launch the LBXPeg, a stablecoin backed by GBP.
While these stable are generally backed by fiat currency, it is yet to be seen if they will control the volatility for which they were created.