Galoy Introduces Bitcoin-backed Synthetic Dollar Pegged to USD

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  • Galoy also announced a $4 million capital raising to support the development.
  • Stablesats’ source code may be seen on GitHub and on a dedicated website.

The Lightning Network may eventually allow users to send and receive dollars with the press of a button. Wednesday, Galoy, the open-source financial platform that supports El Salvador’s Bitcoin Beach Wallet, launched its Stablesat product.

According to Galoy CEO Nicolas Burtey:

“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 are able to 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.”

Short-term Volatility Price Risk Addressed

As a replacement for the present stablecoin infrastructure and regular bank integration, Stablesats uses derivative contracts to produce a bitcoin-backed synthetic dollar that is tied to the US dollar. That short-term volatility price risk now stands as the largest obstacle to the widespread use of bitcoin (BTC) as a form of casual payment is being addressed by the firm by enabling dollars to be exchanged for Bitcoin (BTC).

Galoy also announced a $4 million capital raising to support the development of its core GaloyMoney bitcoin banking platform, a flexible API, and an enterprise-ready Lightning Network gateway that enables enterprises to easily access Lightning payments.

Stablesats’ source code may be seen on GitHub and on a dedicated website, in accordance with Galoy’s open approach. The BitMEX cryptocurrency exchange devised a perpetual inverse swap utilizing perpetual futures contracts, which Stablesats utilizes to generate the synthetic USD. 

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