Arthur Hayes, co-founder of BitMEX, suggests a stablecoin based on Bitcoin

Stablecoins are being scrutinized by US regulators more and more, but the community keeps coming up with new suggestions for stablecoins that are not tied to the dollar. A new stablecoin with a value indexed to $1 worth of Bitcoin BTC and one inverse perpetual swap of BTC against USD has been proposed by Arthur Hayes, co-founder and former CEO of the BitMEX cryptocurrency exchange. In a March 8 blog post titled “Dust on Crust,” he described the concept of the future Satoshi Nakamoto Dollar (NUSD), also known as the NakaDollar.

The Satoshi Nakamoto Dollar, a proposed stablecoin, seeks to be totally independent of any fluctuations in the value of the US dollar, which necessitate financial services

The proposed NakaDollar, in contrast to popular reserve-backed U.S. dollar-pegged stablecoins like Tether (USDT) and USD Coin USDC $1.00, will only be dependent on derivatives exchanges that feature liquid inverse perpetual swaps, according to Hayes.

The proposed stablecoin would be explicitly based on a series of short BTC positions and USD inverse perpetual swaps, maintaining its 1:1 peg to the U.S. dollar through mathematical exchanges between the new decentralized autonomous organization (DAO) — NakaDAO — authorized participants, derivatives exchanges.

According to Hayes, the NakaDollar stablecoin creation procedure won’t involve any USD transactions that call for the assistance of banks. The planned NUSD stablecoin will not be decentralized, he continued, adding:

The centralized crypto derivatives exchanges would be the NakaDollar solution’s weak areas. Decentralized derivative exchanges were not included because they lack liquidity compared to their centralized counterparts.

In light of the ongoing market collapse, the owner of Silvergate Bank, a significant crypto-focused bank in the United States, has announced plans to liquidate the bank’s activities. The Paxos Trust Company was immediately told to stop issuing Binance USD BUSD $1.00, one of the biggest U.S. dollar-pegged stablecoins on the market, by the New York Department of Financial Services. As was previously mentioned, Paxos has deposits with Silvergate and Signature among other financial institutions.

In light of the increasing push from regulators, Hayes is not the only one who is thinking about USD-independent stablecoins. Changpeng Zhao, the CEO of Binance, predicted in February that the stablecoin market would likely shift to other fiat currencies, such as the euro, yen, or Singapore dollars, as a base.

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