The post Polkadot Moves to Launch DOT-Backed pUSD Stablecoin appeared on BitcoinEthereumNews.com.

The Polkadot community is moving toward launching a native stablecoin, pUSD, backed entirely by its DOT token. The proposal calls for deploying the DOT-collateralized stablecoin on the Polkadot Asset Hub using the Honzon protocol stack. This is the same framework that previously powered Acala’s failed aUSD stablecoin. Sponsored Sponsored Polkadot Community Backs pUSD to Reduce Reliance on USDT and USDC According to the proposal, pUSD is structured as an over-collateralized debt token, allowing users to borrow against their DOT holdings without liquidating them. PUSD aims to address past shortcomings and provide the network with a fully collateralized, decentralized stablecoin by focusing solely on DOT as collateral. If approved, it could reduce reliance on external stablecoins like USDT and USDC, while streamlining the OpenGov DOT-USDC/USDT conversion mechanism. “This would be expected to be the NATIVE stablecoin for Polkadot Asset Hub, reduce/replace dependence on USDT/USDC including OpenGov DOT-USDC/USDT stablecoin conversion process,” the proposal stated. Polkadot Treasury could also integrate the stablecoin, enabling users to make payments in pUSD instead of DOT. This would eliminate the need for the Treasury to manage separate stablecoin reserves. Additionally, it could also pave the way for using pUSD for staking rewards, gradually replacing DOT inflation over time. Meanwhile, Polkadot’s push for a native stablecoin comes at a critical juncture in the development of the blockchain network. Sponsored Sponsored According to DeFi Llama data, the network hosts less than $100 million in stablecoin assets, a fraction of the liquidity available on Ethereum and Solana. Polkadot Stablecoin Market Cap. Source: DeFiLlama This shortage has constrained decentralized finance activity and limited developer experimentation on Polkadot. Considering this, Gavin Wood, Polkadot’s co-founder, stressed that a fully collateralized decentralized stablecoin is “strategically essential.” He added that it needs to be deployed as soon as possible to unlock the network’s financial potential.…

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Filed under: News - @ September 28, 2025 10:27 am