Stablecoin market is under threat from the CBDC and the regulations. And running a stablecoin product and trying to compete in the market is not going to be any easy. However people who want to control the stablecoin narrative continue to launch their own in the vast sea of the cryptocurrency and blockchain.
France too has been into dabbling with the stablecoins and the blockchain tokens. There is a company named "Usual" which is into the finance protocol. This company in regulation with the french govt has managed to release the stablecoin that has been backed by the real world assets.
Let's talk about the stablecoin launched by the Usual Protocol named USD0.
What is USD0? And How does it work?
USD0 is a permissionless stablecoin. And this stablecoin is backed by the real world assets. So your stablecoin also gains out of the assets handled by the stablecoin. In this case the stablecoin gets the yield in the token named as USUAL. This is the governance token of the blockchain. This token decides the future of the chain and the governance that is on the chain.
And this token is going to make sure to that you are going to vote into the proposals and also you can swap the gain through this token. In short the USD0 would be pegged to the USD and the assets which are backing it are going to maintain the peg. Which kind of makes this a bit more secure and also usable on the chain long term which is what we expect from the stablecoin.
What is the need for the USD0 and what can we expect more out of the USUAL?
Current stablecoins are plain old CBDC type. Like you are just exchanging the value. And this would just make things more complicated when the peg does not remain or even the times when the backed assets don't generate any form of value. Like say Tether and the USDC have the backed assets with the US treasury but they don't have any yield there.
In such case the USDO make sure to bring the RWA which we call it as a real world assets. And this would make it easier for anyone who wants to make sure to do the stablecoin that brings some yield. So if you happen to do that you would be able to also get the peg matched in the same context.So in such case USUAL is the token that would earn the yield and would be swaping for the value.
What to expect of Stablecoin pegged to USD in the world of Web3?
Currently what we have in the stablecoin is regulated and managed by variety of nations and the peg is maintained legally. Which means the companies that work in the crypto and the stablecoin space like Tether, Circle and others are going to make the stablecoin peg a bit reliant on the govt based assets. Which is what we find it common.
However the web3 world requires something that does not just give return of value but also be used for generating the yield based on the real world backed assets. So the USD0 happens to fill this space up. And it would also make sure to keep the stablecoin space peg maintained and it does not get LUNA like stablecoin historical event. So USD0 hopefully changes that in a harmless way.
USD0 from the USUAL protocol makes a decent stablecoin which france wishes to regulate and use it in the real world scenario. So this would make a good stablecoin in upcoming times among the spaces where nations exchange stablecoin and it's yield.