Polkadot Community Backs Proposal for DOT-Backed Algorithmic Stablecoin pUSD
The Polkadot group has opened a vote on a proposal for pUSD, a local stablecoin backed totally by DOT tokens, via a governance referendum at the moment underway on the community’s “Wish for Change” observe.
The proposal, detailed in RFC-155 and authored by Bryan Chen, would deploy the stablecoin on Polkadot Asset Hub utilizing the Honzon protocol beforehand employed by Acala’s failed aUSD mission.
At the time of writing, Aye holds 74.62%, whereas Nay holds 25.40%, in opposition to an 80.40% approval threshold.
Community Split Over Acala’s Technical Legacy
The initiative seeks to cut back Polkadot’s dependence on USDT and USDC, which at the moment dominate the ecosystem with a mixed market cap of $74.05 million, with USDC at 56.79% dominance.
The proposal has generated sturdy controversy resulting from its reference to Acala, whose aUSD stablecoin collapsed following a 2022 exploit that broken belief throughout the ecosystem.
Multiple outstanding group members have voted in opposition to the proposal, particularly citing issues about Acala’s involvement.
TheGlobedotters acknowledged that “nobody from Acala ought to be concerned with any stablecoin within the ecosystem, particularly a strategic one like this, ever once more,” whereas noting that aUSD’s failure stemmed from liquidity pool misconfiguration fairly than Honzon protocol flaws.
The White Rabbit shared related issues, voting in opposition to the proposal whereas supporting the idea of a local stablecoin in precept.
The voter outlined two situations for potential assist. First, a transparent assurance that no Acala workforce members could be concerned in growth; second, express Technical Fellowship oversight of governance and threat administration.
Another group member famous that “Acala is useless due to AUSD” and warned that speeding implementation might injury Polkadot’s fame.
Gavin Wood Pushes Multi-Track Stablecoin Strategy
On September 10, Polkadot founder Gavin Wood outlined his imaginative and prescient for the ecosystem’s stablecoin method, which preceded the pUSD proposal.
Wood emphasised that “Polkadot could be remiss to not have its personal native stablecoin” and specified necessities together with full DOT collateralization, Polkadot governance management, and DAI-level safety ensures.
Gavin is bullish on Hollar stablecoin:
• Decentralized
• Backed by DOT and extra
• Well-integrated with the Polkadot ecosystem@hydration_netpic.twitter.com/YqwIJyoBrN
— The Dots
(@TheDotsTalks) September 2, 2025
He expressed assist for Hydration’s upcoming HOLLAR stablecoin whereas sustaining {that a} protocol-level DOT-backed stablecoin stays strategically crucial.
Wood additionally launched the idea of a “stable-ish” DOT asset that will settle for some volatility whereas avoiding huge collateral necessities.
This middle-ground method between hyper-volatile DOT and strict greenback pegs would search to “soften volatility” for customers searching for partial stability with out full collateralization prices.
Until a pure DOT stablecoin exists, Wood indicated a desire for HOLLAR over USDT and USDC, although he acknowledged that centralized stablecoins should be wanted for validator payouts and sensible integrations.
The pUSD proposal arrives as Polkadot implements major tokenomics changes, having authorized a 2.1 billion DOT onerous cap in September via Referendum 1710 with 81% assist.
The community is shifting from its inflationary mannequin of 120 million annual DOT issuance to a declining schedule that may cut back minting to under 20 million by the early 2030s.
The present circulating provide stands at 1.6 billion DOT, with the full provide projected to stabilize close to 1.91 billion by 2040 underneath the brand new framework.
Global Stablecoin Market Exceeds $300B as Regulatory Framework Solidifies
The pUSD debate unfolds in opposition to surging world stablecoin adoption, with complete market capitalization surpassing $300 billion for the primary time in September.
During this time, Circle’s NYSE debut saw shares rise 400% post-IPO, valuing the USDC issuer at $30 billion, whereas Tether launched a U.S.-compliant stablecoin and is searching for $500 billion in funding.
Given the fast-paced development of the sector, Treasury Secretary Scott Bessent projects that the sector will attain $3 trillion by 2028 as stablecoins combine into world funds and decentralized finance.
Citigroup also forecasts a stablecoin market cap between $1.6 trillion and $3.7 trillion by 2030, pushed by clearer regulation and institutional participation.
The financial institution warned that main issuers might change into among the many largest U.S. Treasury holders by the tip of the last decade, probably disrupting conventional banking via deposit substitution.
The GENIUS Act, signed in July, has offered federal oversight for stablecoin issuers, which has largely aided this development.
Meanwhile, a consortium of nine European banks, together with ING, UniCredit, and Deutsche Bank, is exploring a euro-denominated stablecoin launch to compete with greenback dominance.
As Mark Aruliah of Elliptic acknowledged, European banks must “transfer shortly to undertake and scale credible euro-denominated stablecoins” or threat ceding floor to U.S. and Asian opponents.
The put up Polkadot Community Backs Proposal for DOT-Backed Algorithmic Stablecoin pUSD appeared first on Cryptonews.
