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USDi Partners Notes Launch of the USDi Coin, the First US Currency to Permanently Preserve Purchasing Power
EntSun News/11056042
BASKING RIDGE, N.J. - EntSun -- USDi Partners today launched its first cryptocurrency project, which will allow investors to hold an asset that is permanently linked to the purchasing power a US Dollar had in December 2024.
The coin (an ERC-20 token on the Ethereum blockchain) will be available to accredited investors from market making firms that have passed USDi Partners' AML/KYC process and are able to mint or burn the token directly. Once an investor buys a USDi coin with 'normal' dollars, the value of that coin will rise every day on the basis of the increase in the Not-Seasonally-Adjusted US Consumer Price Index for Urban Consumers, calculated and released by the US Bureau of Labor Statistics, which is the same index on which trillions of dollars' worth of U.S. TIPS bonds are based.
A Coin that Always Buys What a Dollar Buys Today
Holding the USDi Coin will effectively be the same as holding a dollar whose purchasing power rises as the cost of goods and services increases. If the US CPI index rises 10% from the launch date, the value of a USDi Coin will be $1.10 in terms of the current dollar, so that the investor's purchasing power is undiminished. "The idea for USDi was inspired by the Chilean Unidad de Fomento (UF), a non-circulating currency that since 1967 has been indexed to the price level in Chile. The UF is often used as the basis for contracts in Chile, allowing counterparts to agree on terms without worrying about how inflation will change the significance of the sums exchanged," explained Michael Ashton, Co-Founder of USDi Partners. "But, unlike the UF, the USDi Coin will actually circulate."
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The USDi Coin is collateralized by reserves that are managed by an inflation-hedging specialist to keep up with inflation in both the short- and long-term. The Coin itself, however, will not fluctuate on the basis of investment returns but will always track US CPI exactly. (Because of the public release schedule of the CPI, the value of the USDi Coin on any given day will always be known from 2-6 weeks in advance.)
The CPI index on which the USDi Coin is based is calculated according to a publicly-available handbook of methods and released publicly, along with hundreds of subcomponents and regional indices, on the website of the Bureau of Labor Statistics. This makes it ideal for Phase 2 of the USDi project.
Finally, Medical Inflation (and Other Things) Will Be Investible
In Phase 2, the USDi Coin will become splittable, so that an owner of a USDi Coin will be able to divide it into subcomponents that track the inflation rate of individual parts of the consumption basket, and trade them separately. For example, upon the launch of Phase 2 it will be possible for the first time ever to invest in Medical Care CPI directly. This is an innovation beyond just crypto, says Andy Fately, Managing Partner and Co-Founder of USDi Partners. "What you have never been able to do before, but will when we launch Phase 2, is to buy a collateralized coin to track Medical Care or College Tuition inflation explicitly. This hasn't even been done in the Trad Fi world, but the low frictions of the crypto world make it the ideal venue for this breakthrough."
More on EntSun News
About USDi Partners
USDi Partners LLC was formed in mid-2024 following an off-mic discussion after recording an episode of Cents and Sensibility: the Inflation Guy Podcast. Michael Ashton asked Andy Fately and Susan Joseph, his guests on the podcast, whether anyone had created a coin that is stable in real space. The answer – no – set in motion a series of intense discussions about how best to do this in a way that was financially sound and regulatorily acceptable. USDi Partners was formed to offer and make markets in this new real-stable coin while it also expands its roster of partnered external market-makers in order to bring this innovation – and other future innovations - to the world.
The coin (an ERC-20 token on the Ethereum blockchain) will be available to accredited investors from market making firms that have passed USDi Partners' AML/KYC process and are able to mint or burn the token directly. Once an investor buys a USDi coin with 'normal' dollars, the value of that coin will rise every day on the basis of the increase in the Not-Seasonally-Adjusted US Consumer Price Index for Urban Consumers, calculated and released by the US Bureau of Labor Statistics, which is the same index on which trillions of dollars' worth of U.S. TIPS bonds are based.
A Coin that Always Buys What a Dollar Buys Today
Holding the USDi Coin will effectively be the same as holding a dollar whose purchasing power rises as the cost of goods and services increases. If the US CPI index rises 10% from the launch date, the value of a USDi Coin will be $1.10 in terms of the current dollar, so that the investor's purchasing power is undiminished. "The idea for USDi was inspired by the Chilean Unidad de Fomento (UF), a non-circulating currency that since 1967 has been indexed to the price level in Chile. The UF is often used as the basis for contracts in Chile, allowing counterparts to agree on terms without worrying about how inflation will change the significance of the sums exchanged," explained Michael Ashton, Co-Founder of USDi Partners. "But, unlike the UF, the USDi Coin will actually circulate."
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The USDi Coin is collateralized by reserves that are managed by an inflation-hedging specialist to keep up with inflation in both the short- and long-term. The Coin itself, however, will not fluctuate on the basis of investment returns but will always track US CPI exactly. (Because of the public release schedule of the CPI, the value of the USDi Coin on any given day will always be known from 2-6 weeks in advance.)
The CPI index on which the USDi Coin is based is calculated according to a publicly-available handbook of methods and released publicly, along with hundreds of subcomponents and regional indices, on the website of the Bureau of Labor Statistics. This makes it ideal for Phase 2 of the USDi project.
Finally, Medical Inflation (and Other Things) Will Be Investible
In Phase 2, the USDi Coin will become splittable, so that an owner of a USDi Coin will be able to divide it into subcomponents that track the inflation rate of individual parts of the consumption basket, and trade them separately. For example, upon the launch of Phase 2 it will be possible for the first time ever to invest in Medical Care CPI directly. This is an innovation beyond just crypto, says Andy Fately, Managing Partner and Co-Founder of USDi Partners. "What you have never been able to do before, but will when we launch Phase 2, is to buy a collateralized coin to track Medical Care or College Tuition inflation explicitly. This hasn't even been done in the Trad Fi world, but the low frictions of the crypto world make it the ideal venue for this breakthrough."
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About USDi Partners
USDi Partners LLC was formed in mid-2024 following an off-mic discussion after recording an episode of Cents and Sensibility: the Inflation Guy Podcast. Michael Ashton asked Andy Fately and Susan Joseph, his guests on the podcast, whether anyone had created a coin that is stable in real space. The answer – no – set in motion a series of intense discussions about how best to do this in a way that was financially sound and regulatorily acceptable. USDi Partners was formed to offer and make markets in this new real-stable coin while it also expands its roster of partnered external market-makers in order to bring this innovation – and other future innovations - to the world.
Source: USDi Partners LLC
Filed Under: Financial
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