BTCFi project Elastos has launched the stablecoin BTCD, backed by the first cryptocurrency.

The team aims to create a “digital version of the Bretton Woods system” — the post-war agreement that established the U.S. dollar’s peg to gold and affirmed its role as the global reserve currency to promote financial stability.

“We are reimagining Bretton Woods with bitcoin at its core,” Elastos stated.
Dollar-pegged stablecoins are typically backed by fiat currencies and short-term U.S. government bonds known for their high liquidity.

BTCD, unlike traditional stablecoins, is backed by a volatile asset — bitcoin.

In a conversation with CoinDesk, Elastos representatives explained that they address price fluctuation issues through overcollateralization — at 160–200% of BTCD’s value.

“Oracles update the price of the first cryptocurrency to the dollar in every block. If coverage drops to 110%, arbitrageurs can repay the debt, buy back digital gold at a slight discount, and eliminate the risk,” the developers noted.
Thus, the exchange rate is algorithmically regulated by minting and burning BTCD based on supply and demand dynamics.

The total market capitalization of the stablecoin segment has surpassed $260 billion.

The total TVL of decentralized applications built on Bitcoin amounts to $6.41 billion. The segment ranks third on the DeFi Llama leaderboard, behind only the Ethereum- and Solana-based ecosystems.

The largest BTCFi platform is Babylon Protocol, with a restaking TVL of $4.9 billion.

As a reminder, Cardano founder Charles Hoskinson proposed allocating $100 million worth of ADA tokens from the project’s reserves to purchase bitcoin and stablecoins.