A new stablecoin, USDi, has been introduced by veteran derivatives and foreign exchange traders in the U.S., designed to adjust its value based on inflation.
Unlike traditional stablecoins pegged directly to the U.S. dollar, USDi’s price fluctuates according to changes in the Consumer Price Index (CPI) and Treasury Inflation-Protected Securities (TIPS) performance.
The concept, spearheaded by Michael Ashton and his team at USDi Partners LLC, aims to address inflation risks by maintaining the purchasing power of the dollar as it was in December 2024.
Ashton described USDi as an “inflation-linked cash” solution, likening it to TIPS but with more liquidity.
“The riskless asset doesn’t actually currently exist, and that’s inflation-linked cash,” Ashton explained.
He emphasised that inflation erodes cash’s value over time, and USDi seeks to counteract this by adjusting its value in line with CPI data.
USDi’s initial value on April 15, 2025, was $1.00863, reflecting inflation growth since its December 2024 benchmark.
The token’s minting and burning process aligns with daily CPI calculations, interpolated between monthly government-released data.
This ensures that USDi remains responsive to inflation trends while maintaining stability.
To back the stablecoin, USDi Partners will manage a reserve fund comprising assets like TIPS, further solidifying its reliability.
However, for now, participation is limited to accredited investors, with no official public release date announced.
The launch of USDi highlights innovation in the stablecoin market as developers explore alternatives to mitigate inflation risks.
While traditional stablecoins are pegged to fiat currencies susceptible to inflationary pressures, USDi offers a dynamic approach by directly linking its value to real-time economic indicators.
Ashton noted that this model could redefine risk-free assets in financial markets.
However, with intense competition in the stablecoin sector, USDi will need strong adoption and early traction to establish itself as a viable option for investors seeking inflation protection.