Unleashing the Power of Stablecoins
On 31st July, 2023, a significant milestone was reached in the world of digital finance. The Unitas Protocol mainnet went live, ushering in a new era of stablecoin functionality. This revolutionary DeFi protocol introduces unitized stablecoins, a brand-new category of stablecoin that serves as Units of Account for various emerging market currencies.
Bridging the Dollar Shortage Gap
In emerging markets, dollar shortages have been a persistent issue hampering business growth and individual prosperity. The Unitas Protocol offers a solution by enabling universal access to USD liquidity for safe and affordable cross-border transactions. Anyone can now mint unitized stablecoins using USDT.
The protocol “unitizes” USD stablecoins into one local currency unit. The inaugural set of unitized stablecoins open for minting includes USD91 (pegged to INR), USD971 (pegged to AED), USD84 (pegged to VND), and USD1 (pegged to USD).
A New Naming Convention
Unitas’ naming convention prefixes its stablecoin names with the Store of Value (e.g., “USD”) and suffixes them with country codes that indicate Units of Account of emerging market currencies. For instance, “91” represents INR.
This means that holding a unitized stablecoin like USD91 mirrors the value of one INR unit denominated in USDT. It’s essentially a value translator between USD and other currencies, guaranteeing unconditional conversion back to a USD stablecoin.
Facilitating Cross-Border Transactions
For countries like India, where transactions predominantly occur in INR, this development is particularly significant. An Indian importer no longer needs to purchase USDT with INR cash via peer-to-peer transactions before paying their supplier.
More Than Just Convenience
Beyond simplifying cross-border transactions by enabling local currency-denominated dealings using stablecoins, this protocol has far-reaching implications:
- It promotes foreign investment.
- It facilitates cross-border payment.
- It provides global market access.
- It encourages DeFi participation.
- It ensures efficient use of USD liquidity.
These are just some ways how this innovative technology is set to unlock the immense potential lying dormant within emerging markets.
Note: The information in this article is intended purely for informational purposes and should not be considered financial or investment advice. Always conduct your own research or consult with a professional before making any financial decisions.