Galoy Inc., the team behind the wallet of El Salvador’s Bitcoin circular economy Bitcoin Beach, is adding a new feature to that infrastructure: bitcoin-backed synthetic U.S. dollars.
Often seen as a need among citizens of developing countries[1], a representation of the U.S. dollar backed by BTC promises to enable anyone to hedge against the daily volatility of bitcoin. While it can be argued that bitcoin is the better currency and could be used as such in daily transactions, some see value in saving in BTC and spending in USD –– and Galoy’s new product feature, Stablesats, allows users to do that all on Bitcoin.
“With Stablesats-enabled Lightning wallets, users are able to send from, receive to and hold money in a USD account in addition to their default BTC account,” said Nicolas Burtey, CEO of Galoy, in a statement sent to Bitcoin Magazine. “While the dollar value of their BTC account fluctuates, $1 in their USD account remains $1 regardless of the bitcoin exchange rate.”
Notably, Galoy's implementation differs from a common "stablecoin" such as Tether's USDT in that there is no token –– it's just bitcoin stabilized into a dollar balance.
Galoy also shared it had raised $4 million to further develop GaloyMoney –– its open-source Bitcoin banking platform, a versatile API and an enterprise-ready Lightning gateway providing organizations access to Lightning payments. The round was led by Hivemind Ventures, with participation from Valor Equity Partners, Timechain, El Zonte Capital, Kingsway Capital, Trammell Venture Partners and AlphaPoint.
“The GaloyMoney open-source core banking platform includes a secure backend API, mobile wallets, point-of-sale apps, an accounting ledger and administrative controls,” the company said in a statement.
How Does Stablesats Work?
Stablesats[2] is able to offer a stable dollar balance backed by bitcoin through inverse perpetual swaps
