Galoy, the company that created the open-source banking architecture on which El Salvador’s Bitcoin Beach Wallet is based, has announced plans to launch Stablesats, a Bitcoin-backed synthetic dollar product.
Stablesats is an open-source system designed to be a viable alternative to traditional stablecoins. It functions by utilizing perpetual inverse swap, a financial instrument developed by BitMex. The code for Stablesats is available on GitHub.
With this development, Galoy believes that individuals can utilize Lightning in their daily payments and transactions while reducing their volatility-related exposure.
This stablecoin alternative will use derivative contracts to offer a bitcoin-backed synthetic dollar pegged to the U.S. dollar.
Galoy raised $4 million in a series of funding rounds to improve the bitcoin banking architecture that powers the Stablesats.
According to the CEO of Galoy, Nicolas Buery, in a press release,
“Bitcoin has brought digital transactions to previously unbanked communities across Latin America, Africa, and beyond. However, its volatility makes managing financial obligations difficult. With Stablesats-enabled Lightning wallets, users can send from, receive to, and hold money in a (U.S. dollar) account in addition to their default BTC account. While the dollar value of their BTC account fluctuates, $1 in their USD account remains $1 regardless of the bitcoin exchange rate.”
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