Frequently Asked Questions

What is USD? and why is it important and needed?

USD? provides a fully collateralized US dollar stablecoin, and is based on the open source asset-backed stablecoin framework developed by Plus USD.

As crypto assets have grown in their importance and adoption, it’s become vital to be able to use fiat currencies for payments and trading. A price-stable currency such as the US dollar (and similar stable currencies such as EUR, GBP, JPY, RMB, etc.) is critical for enabling mainstream adoption of blockchain technology for payments, as well as to support maturation in financial contracts built on smart contract platforms, such as tokenized securities, loans, and property.

Existing approaches have lacked financial and operational transparency, have operated in unregulated offshore jurisdictions with unknown banking and audit partners, and have been built as closed-loop ecosystems and closed source technologies.

USD? solves these problems by offering a solution with detailed financial and operational transparency, operating within the regulated framework of US money transmission laws, with established banking partners and auditors, and is built on an open source framework with an open membership scheme that eligible financial institutions can participate in.

How does a financial institution become an issuer of USD??

Commercial issuers of USD? will be required by Plus USD to:

• Hold any / all applicable licenses in their operating jurisdictions
• Have audited AML and Compliance programs that meet FATF standards
• Hold reserves on a 1:1 basis with issued tokens and provide monthly published proof of reserves attested to by certified public auditors
• Support fungible exchange and redemption of USD? tokens from other authorized issuer members
• Meet other reporting and review requirements established by Plus USD

In the coming months, Plus USD is launching its broader membership framework which includes established financial technology firms as issuers.

How does USD? compare to other stablecoin initiatives under development?

There are a number of different stablecoin initiatives ranging from algorithmically-backed stablecoins to crypto-backed stablecoins to dollar-backed and hybrid projects that combine those approaches.

The Plus USD framework focuses on providing a fiat asset-backed and denominated approach to stablecoins. We believe that during this phase of the market, most market participants don’t desire a new currency, but instead want to be able to use their existing major national or global reserve currencies on top of open public chains. Customers want price-stability and the trust and regulatory framework of existing central bank money but with the openness, speed, security and global reach of crypto powered networks.

We also believe that the market will value an open architecture and membership-governed model that a wide range of market participants can build upon, including crypto companies from every major currency zone in the world, leading digital wallet providers, and banks that want to take advantage of public chains for settlement.

Over time, we believe that stablecoins will evolve in terms of their backing methods, and will reflect a combination of algo and bonded backing, and include baskets of underlying currencies and assets that can provide for a true global digital currency that billions of people can use. We’re just not there today, and need to map the existing central bank money system onto this infrastructure before we can credibly take these steps toward global digital currency models.

How does USD? compare to other asset-backed stablecoins in production?

There are several major differences.

USD? is issued using The Plus USD open source framework and membership scheme, and it is available as a framework that multiple companies can leverage. Soon other financial institutions will be able to become USD? issuers (and issuers of other fiat stablecoins - e.g. EURC, JPYC, GBPC), and customers will be able to tokenize USD and redeem USD? tokens in an open and interoperable ecosystem of financial institutions. A membership governance model for issuers shall ensure that they meet technical, operational, regulatory, compliance and audit requirements.

The ecosystem established around USD? is also broad and more diverse than the established crypto trading use case. USD? is seen by many in the industry as a solution component that can be incorporated into other apps and services.

How does USD? work technically?

At a high level, customers who onboard through a USD? issuer can transfer funds into the system; the issuer then executes a series of commands with the Plus USD Network to verify, mint, and validate USD? tokens, and the customer can transfer those tokens elsewhere as they see fit (subject to the token’s compliance controls).

Redemption follows the reverse sequence: a customer requests a redemption from an issuer, and upon successful verification and validation, the appropriate USD? tokens are irrevocably deleted from circulation (“burned”), and funds from underlying reserves are transferred back to the customer’s external bank.

More details on the technology can be found at the Plus USD whitepaper and at our developer resources page.

Can multiple companies issue USD? tokens? What about non-USD currency tokens?

Yes. By leveraging The Plus USD membership scheme and open source framework, many different financial institutions around the world could become issuers of USD?. In the future, Plus USD expects to exist as a global scheme in which members may join from any currency zone in the world.