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Stably has issued Stable Coin on more than 10 chains, but as of April 30, the issuance of its Stable Coin Stably USD is only 7.25 million, and the price has fluctuated significantly.

Author: Jiang Haibo

The emergence of the Ordinals protocol has brought a new narrative to BTC. These inscriptions or BRC20 Tokens are traded in the Decentralization market, almost always using BTC as an intermediary, without a stable payment tool. However, in larger volume centralized exchanges, people usually prefer to use USDT, USDC, or USD for transactions.

On May 25th, Stably announced on Twitter that it has issued a USD-backed, regulatory-compliant Stable Coin #USD on the BTC Ordinals protocol. Subsequently, Ordinals' main Wallet and Non-fungible Token marketplace UniSat also announced their collaboration with Stably. It will undoubtedly be more convenient for users to buy and sell BRC20 Token on the UniSat market using Stable Coin. This is not the first time Stably has issued Stable Coin, as it has previously issued Stable Coins on various on-chain platforms such as ETH, Harmony, and Stellar.

BRC20 #USD basic information

Stably's stablecoin issuance is called Stably USD, usually represented as USDS. Since USDS in Ordinals has been occupied, and BRC20 token symbols cannot be repeated and must be 4 characters, Stably ultimately chose '#USD' to represent its stablecoin issuance.

The Maximum Supply of #USD adopts the maximum theoretical limit of 69.42 trillion BRC20 Tokens. According to the disclosed Treasury Wallet, the minting of #USD has reached the upper limit through a minting transaction with the Treasury Wallet, and Stably has also deployed and minted a variety of BRC20 Tokens related to the name of USD, including USD* and ^USD.

It is important to note that Stably does not directly hold the issuance#USD required, but it is held by the custodian company Prime Trust. Prime Trust assists Stably in custody and establishes a custody account in a bank with FDIC deposit insurance. However, Prime Trust itself is not a deposit institution or bank protected by FDIC, and the FDIC deposit insurance has a maximum coverage limit of only 250,000 USD per customer. FDIC deposit insurance also does not protect against losses caused by Prime Trust's bankruptcy or unauthorized access to the account.

Stably #USD minting and redemption requirements

According to Stably's description, #USD is a compliant stablecoin, and there are no requirements for buying and selling #USD on the Secondary Market. However, if you want to mint or redeem #USD through Stably, you need to follow the corresponding Compliance process.

First, users need to register a Stably Ramp account, complete KYC verification, add a bank card payment method, and create a trading buy request. Then, the Stably team will contact the customer via email within 2 working days and explain the subsequent steps.

When buying stablecoins, customers deposit dollars or USDC/USDT into Prime Trust, and receive #USD in the BRC20 Wallet. When selling, send #USD to Treasury WalletAddress, and receive dollars or USDC/USDT.

Payments made with USDC and USDT on Ethereum can be credited on the same day, but due to the need for Stably's manual confirmation for current transactions, if you deposit Fiat Currency via Fedwire and SWIFT, it may take up to 5 business days. Stably plans to support automatic transactions with Fedwire, ACH, SWIFT, etc. in the third quarter of this year.

In addition, although there is no cost for minting and redemption, Stably will charge a 0.5% conversion fee for using USDT/USDC minting; there will also be a fixed fee for deposits made through Fedwire or SWIFT. In addition to this, you will also need to pay the gas fee for the Blockchain network.

Stably USD has been issued on 12 chains, but on a smaller scale.

Although Stably USD has been on-chain issued in over 12 different issuances, the overall scale is not large. According to the independent auditor's report provided by The Network Firm to Stably, as of April 30, 2023, the issuance volume of Stably USD is a total of 7258534, and the reserve account balance is 7258974 USD, with the reserve slightly higher than the USDS issuance volume.

On Compliance, Stably's official website shows that its subsidiary holds an MSB financial license issued by the Financial Crimes Enforcement Network (FinCEN) under the Ministry of Finance. The partner chosen by Stably, Prime Trust, is a trust company regulated by the state of Nevada and acts as a 'Qualified Custodian' regulated by the US Securities and Exchange Commission under the Investment Advisers Act, helping clients custody Cryptocurrency and Fiat Currency.

Based on this information, the license held by Stably issuanceStable Coin seems to have some gap compared to other Stable Coinissuance merchants like Circle, as Circle also holds the BitLicense license in New York State.

Stably Stablecoin questioned

As a stablecoin issuer that is not considered top-tier, Stably has frequently launched stablecoins on multiple Blockon-chain, and its approach has also been questioned by Decrypt. Here are a few points summarizing the views from the Decrypt article.

#USD's total supply is 69.42 trillion, but there is no reserve. Due to the restrictions of the BRC20 rules, #USD cannot increase its supply based on demand, so the theoretical maximum quantity of BRC20 Tokens is directly used as the issuance amount. Although Stably claims that all #USD held by the Treasury Wallet should be considered as unissued Tokens, the fact that these Tokens already exist in the Treasury Wallet and can be transferred or sold at any time may increase concerns.

Stably claims that its subsidiary, Stably Trading LLC, holds a FinCEN MSB license, but Decrypt reports that the registration number provided on Stably's official website does not match the information on the FinCEN website.

The price of the Stable Coin USDS issued by Stably in the past was not stable enough. According to CoinGecko's data, in the past year, USDS rose to a maximum of 10 US dollars and fell to a minimum of 0.6 US dollars.

Stably's custodian, Prime Trust, does not directly hold Stably's USD reserves, nor is it FDIC-insured, but holds USD in several banks.

Stably has issued stablecoins on more than 10 chains, with a small issuance volume of only 7.25 million as of April 30th. However, based on Stably's background, it seems to have a significant gap in licenses compared to leading stablecoin issuers Circle and Tether. The price fluctuation of USDS is also more frequent, so users need to be cautious when holding #USD on Ordinals.