Citrea, a layer-2 blockchain for Bitcoin, presented a U.S. greenback-pegged stablecoin designed to abet as a liquidity fashioned on its ecosystem. Citrea uses zero-data proofs, a cryptographic formula that lets networks study transactions with out revealing all underlying data, to decide on job abet to Bitcoin.
The Citrea USD (ctUSD) token is issued by Moonpay, a developer of business rate infrastructure for crypto, which presented a stablecoin launchpad dull final 12 months, Citrea acknowledged in a weblog previous. The token, backed 1:1 by quick U.S. Treasury bills and cash, is its first.
Stablecoin liquidity stays a core bottleneck for Bitcoin-focused decentralized finance (DeFi), the set capital most ceaselessly gets wreck up across bridged versions of greenback tokens. That fragmentation can originate bigger slippage for merchants, slit lending depth and originate bigger systemic threat when a single bridge or collateral asset fails. Citrea says it’s far making an strive to discontinue that peril by issuing ctUSD natively.
“Fragmentation is a symptom of bridging, and we resolve it by build: ctUSD is natively issued on Citrea,” Orkun Mahir Kilic, co-founder and CEO of Chainway Labs, the company building Citrea acknowledged in an interview. “There don’t appear to be any bridged versions to wreck liquidity; there is easiest one canonical asset.”
The token, which is able to be accessible in 49 U.S. states with the exception of Unusual York and greater than 160 international locations exterior the European Economic Location and Canada, is additionally an early take a look at of MoonPay’s push into stablecoin issuance.
“This positions Citrea now now not precise as a participant, but as the launchpad for MoonPay’s unique fashioned of regulated, utility-train digital dollars,” he acknowledged.
The company is additionally leaning into a policy argument. The stablecoin debate is transferring from prohibition to regulations, especially as institutions be taught for compliant programs to pass dollars onchain, Kilic acknowledged.
“The memoir in Washington is transferring from ‘ban it’ to ‘alter it,’ and institutions coming into the crypto ecosystem are one draw or the opposite hunting for property that set aside away with counterparty ambiguity,” he acknowledged. “If we’re looking out to bring global capital onchain for the Bitcoin ecosystem, we have to supply regulated infrastructure for fiat alongside believe-minimized BTC thru Citrea.”
Kilic acknowledged MoonPay’s compliance framework contains the capability to freeze or blacklist addresses “when required by regulations or to discontinue illicit job,” aligning with particular person safety and anti-money laundering standards that stablecoin issuers are increasingly anticipated to meet.
READ MORE: Exodus joins stablecoin bustle with MoonPay-backed digital greenback
