On July 17, 2025, during the opening day of the Web3 Summit, Polkadot co-founder Gavin Wood announced an ambitious plan to introduce a new decentralized stablecoin fully collateralized by the native DOT token.
This launch marks a significant step towards enhancing capital efficiency and scalability within the Polkadot ecosystem.
The stablecoin is currently in its early development phase. Wood revealed that the project team is working on a treasury proposal to secure initial liquidity. This proposal will then be subjected to community review, requiring majority approval by DOT token holders before it can proceed to deployment. If approved, it will become the first stablecoin to be formally launched with sole backing from DOT.
The announcement generated positive market sentiment, with DOT rising by 1.54% in 24 hours, peaking at $4.26 before a slight pullback to $4.19. The token’s weekly performance remains strong with a 14.7% gain and a market capitalization of about $6.3 billion. Additionally, Polkadot’s daily trading volume surged nearly 31% to about $500 million, reflecting growing investor interest ahead of the stablecoin rollout.
This move is a strategic progression from previous efforts within the Polkadot network. In 2022, Acala launched the USD-pegged aUSD stablecoin, which was minted through locking DOT and liquid DOT tokens as collateral. However, the Acala project faced challenges, including a severe security breach in September 2022 that led to a significant depeg event, undermining confidence in aUSD.
Polkadot’s new stablecoin initiative aims to leverage native DOT collateralization to enhance decentralization and stability. The project emphasizes community governance, reflecting a commitment to DAO-led decision-making and sustainability. It aims to transform Polkadot’s DeFi ecosystem by offering a new liquidity option and could positively impact market dynamics for DOT holders.
Meanwhile, JPMorgan Chase is moving forward with stablecoin initiatives, even as CEO Jamie Dimon remains skeptical about their broad appeal and necessity. In the latest quarterly earnings call, Dimon acknowledged JPMorgan’s intent to engage in stablecoin development to keep pace with fintech rivals expanding in digital payments.
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