Stably – a stablecoin-as-a-service provider and fiat to crypto on-ramp – has launched the first-ever dollar-pegged stablecoin issued directly on the Bitcoin blockchain.
The token, Stably USD ($USD) is based on the emerging BRC-20 token standard around which many Bitcoin-based memecoins popularized earlier this month.
Stably USD and the Meme Economy
Per a tweet from Stably on Thursday, Stably USD is redeemable 1 to 1 for USD collateral managed by its custodian, Prime Trust, at FDIC-insured banks. The custodian is subject to external audits by The Network Firm, a digital asset accounting group, to ensure that circulating tokens are always backed 1 to 1.
The token may be issued and redeemed through dollar transfers over Fedwire and SWIFT, or through rival stablecoin transfers including Circle’s USDC, or Tether’s USDT. Direct issuance is available to KYC-verified users across 200 countries, including 44 U.S. states.
The top two stablecoins alone account for a $110 billion+ market cap, but neither of their issuers has announced compatibility with Bitcoin yet. As of May 24, Stably USD’s market cap was just $101,000, but the token’s total supply – including non-circulating coins – is humorously designed to be 69,420,000,000,000.
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The meme number is reflective of the market upheld by the BRC-20 token standard, which was overwhelmingly used to launch speculative memecoins when it rose to prominence in early May. According to brc-20.io, tokens like ordi, piza, pepe, and others have created a cumulative BRC-20 market cap of over $447 million so far.
BRC-20 is an experimental standard for issuing fungible assets using Bitcoin Ordinals. The latter protocol exploded in popularity earlier this year as a method of issuing non-fungible tokens (NFTs) on Bitcoin, and has already turned Bitcoin into the second most popular blockchain for such assets, according to sales data from Cryptoslam.
Stablecoins on Bitcoin
Stably co-founder and CEO, Kory Hoang, said in a press release that he met the creator of BRC-20, Domo, at the Bitcoin 2023 conference in Miami, and told him about his stablecoin plans.
“He thought it was great and funny how we are creating a stablecoin on Bitcoin to enable Bitcoin trading on-chain… With a stablecoin built on Bitcoin,” said Hoang. “I’m still chuckling about it to this day, actually.”
In the Ethereum ecosystem, stablecoins are largely used to empower decentralized finance, providing the backbone for trading dollars through blockchain smart contracts for other crypto assets. However, a report from Bitfinex earlier this month noted that BRC-20 doesn’t support smart contracts, making the use case for Bitcoin-based stablecoins and tokens more limited.
When unveiling the token standard, Domo even admitted that issuing assets on Bitcoin is not a novel idea, and that Taro – a lightning network-based alternative – is “unequivocally a better solution.”
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