The UPUSD is described as a digital asset that is a stablecoin collateralized 1 to 1 with the US dollar. The dollars in question will be domiciled in US, FDIC insured banks.
The organizations that are participating in the UPUSD include Uphold, FBG Capital, Cred, Blockchain at Berkeley, and Brave. The dollar based crypto was announced today, at San Francisco Blockchain Week.
The stablecoin is said to be designed to “attract the next 100 million users” by allowing investors anywhere to access higher yields on deposits and more affordable credit than available from most traditional banks.
The Alliance states that the UPUSD offers users access to a “quarter-billion-dollar line of credit; pays an annual rate of interest of between 2% and 5%; and enables holders to access flexible loans with single-digit rates of interest.”
The stablecoin is handled by reserve management developed by Uphold.
JP Thieriot, CEO of Uphold, said that crypto is delivering the goods to the mass market.
“Worldwide, over 2.5 billion people with bank accounts are likely to be interested in cheaper credit and a higher yield on their deposits. This isn’t about imagined “utility” for a rarified use case. The Universal Dollar should have broad appeal to a wide array of people and, for some in developing economies, could be life changing,” said Thieriot. “Without thousands of employees, miles of high-rent real estate and the baggage of legacy systems, companies in our industry have a big structural advantage over traditional banks. This advantage has to accrue to the benefit of the mass market, or our industry will remain the exclusive domain of technophiles and speculators.”
According to info provided in a release, the UPUSD also incorporates the following added features:
- Safety: fully reserved, built-in loss recovery and optional custody of private keys.
- Inheritability: users may nominate a beneficiary who can ‘call’ the asset on account dormancy.
- Reduced exchange risk: thanks to a ‘detachable’ wallet that permits ‘self custody’ at exchanges.
- Yield: can earn up to five per cent annually on the value of digital holdings.
- Credit: flexible borrowing on competitive terms, secured by the value of digital assets.
Thieriot believes the UPUSD will help crypto go mainstream by providing services to anyone – anywhere. As part of offering, any supported digital asset held at Uphold may be used to earn interest and qualify the user for a secured line of credit.
Earlier this year, the Alliance members announced a “transparent reserve standard” that will underpin a family of “Universal Tokens aiming to provide ‘safer’, more practical, and more ‘spendable’ forms of major cryptocurrencies.”
The Universal Protocol Alliance said it will soon launch Universal Bitcoin (UPBTC) as an ERC-20-compatible, fully-reserved and interoperable token.