What is USD1?
USD1 is a stablecoin pegged to the U.S. dollar at a 1:1 ratio, launched in 2025. The token quickly became one of the largest stablecoins by market capitalization, partly due to its use in major institutional transactions.
How it works
Each token is backed by reserves: short-term U.S. Treasury bills, dollar deposits, and cash equivalents held under the management of a regulated custodian. The issuer mints and redeems tokens at a fixed rate, and the token operates across multiple blockchains.
Pros and cons
- Pros: conservative reserve structure, multi-chain support, use in major settlements.
- Cons: limited operational history, concentration around a politically notable ecosystem, standard stablecoin issuer and regulatory risks.