The Polkadot community is voting on a proposal for pUSD, a stablecoin backed entirely by DOT tokens, through a governance referendum on the network’s “Wish for Change” track. The initiative aims to reduce dependence on USDT and USDC, which dominate with a combined market cap of $74.05 million. A proposal generated controversy due to its connection with Acala. The proposal has received strong opposition from prominent community members, citing concerns about Acala’s involvement in the stablecoin project, given the collapse of Acala’s aUSD stablecoin following a 2022 exploit. Polkadot founder Gavin Wood outlined his vision for the ecosystem’s stablecoin approach, emphasizing the need for a native stablecoin with full DOT collateralization and security guarantees. Wood expressed support for Hydration’s upcoming HOLLAR stablecoin, but highlighted the necessity of a protocol-level DOT-backed stablecoin to soften volatility for users seeking partial stability. The pUSD proposal comes as Polkadot implements major tokenomics changes, transitioning to a declining schedule that will reduce minting below 20 million by the early 2030s, stabilizing the total supply near 1.91 billion by 2040. The pUSD debate occurs amidst surging global stablecoin adoption, with the total market capitalization exceeding $300 billion for the first time in September. Circle’s NYSE debut saw a 400% rise in shares post-IPO, valuing the USDC issuer at $30 billion, while Tether introduced a U.S.-compliant stablecoin and is seeking $500 billion in funding. Treasury Secretary Scott Bessent projects the sector to reach $3 trillion by 2028 as stablecoins integrate into global payments and DeFi, with Citigroup forecasting a market cap between $1.6 trillion and $3.7 trillion by 2030, potentially disrupting traditional banking through deposit substitution. A consortium of nine European banks is exploring a euro-denominated stablecoin launch to compete with dollar dominance, with Mark Aruliah of Elliptic urging rapid adoption to avoid ceding ground to competitors.

Read more at Yahoo Finance: Polkadot Community Backs Proposal for DOT-Backed Algorithmic Stablecoin pUSD