Elastos Launches Bitcoin-Backed Stablecoin BTCD to Enhance Financial Stability

The Elastos BTCFi project has launched a stablecoin called BTCD, which is backed by Bitcoin, the original cryptocurrency.

The team aims to create a «digital counterpart of the Bretton Woods system,» the post-war agreement that established the dollar’s peg to gold, solidifying its status as the global reserve currency to enhance financial stability.

Typically, dollar-pegged stablecoins are backed by fiat currencies and high-liquidity short-term U.S. government bonds. In contrast, BTCD is secured by a more volatile asset—Bitcoin. In a conversation with CoinDesk, Elastos representatives explained that they address the challenges of price volatility through over-collateralization, maintaining a ratio of 160-200% of BTCD’s value.

This mechanism enables algorithmic regulation of its exchange rate through the issuance and burning of BTCD based on the dynamics of supply and demand.

The total market capitalization of the stablecoin segment has exceeded $260 billion. The overall total value locked (TVL) in Bitcoin-based decentralized applications stands at $6.41 billion, ranking third in the DeFi Llama ratings, behind only Ethereum and Solana ecosystems.

The leading BTCFi platform is Babylon Protocol, which has a TVL of $4.9 billion in its restaking service.

Additionally, it’s worth noting that Charles Hoskinson, the founder of Cardano, recently proposed allocating $100 million in ADA tokens from the project’s reserves to purchase Bitcoin and stablecoins.