USDi Stablecoin Launches, Tied to US CPI Growth

Two prominent American experts in inflation-resistant assets and forex derivatives have introduced a novel stablecoin called USDi. This digital currency is unique in that its value is directly tied to the US Consumer Price Index (CPI) growth since December 2024. As of April 15th, the value of USDi stands at $1.00863.

Michael Ashton, one of the co-founders, who began his career in inflation-resistant investments at Barclays Bank in the early 2000s, described USDi as akin to the principal of Treasury Inflation-Protected Securities (TIPS). He likened it to an inflation-resistant savings account, stating that a truly risk-free asset, which is cash protected from inflation, does not currently exist. Ashton emphasized that holding cash is essentially an option on future opportunities, and the cost of that option is inflation. He suggested that the creation of inflation-protected cash could redefine the concept of risk-free assets.

According to a statement from USDi Partners LLC, the token is designed to maintain the same purchasing power as the US dollar had in December 2024. The minting and burning of USDi tokens will be based on its stated value, which aligns with the principal of TIPS and is dependent on the daily CPI. Although the government releases the CPI data monthly, it interpolates daily values for TIPS investors to calculate accrued interest. The CPI value determines the index value for both TIPS and USDi with a two-month lag, meaning the December CPI corresponds to March 1st, with data available through May 31st. The April 15th value of USDi is calculated by dividing the CPI for that day, interpolated between January and February monthly values, by the December CPI, which serves as the constant denominator in the formula.

USDi will be backed by a reserve fund managed by Ashton, who has been overseeing the Enduring US Inflation Tracking Fund for qualified investors since October 2021. This fund holds assets such as TIPS, further solidifying the stability and reliability of USDi.

This launch marks a significant development in the stablecoin market, as USDi offers a unique approach to maintaining value by directly linking it to inflation data. This could provide investors with a new tool to hedge against inflation risks, potentially reshaping the landscape of digital currencies and financial instruments.