Pareto launches USP, backed by stablecoins USDC and USDT
Pareto has launched a synthetic dollar, USP, to connect institutional investors with decentralized finance (DeFi) opportunities, emphasizing the growing role of stablecoins in global finance. USP is fully backed by real-world private credit and requires users to deposit stablecoins like USDC or USDT for minting. Each USP token is collateralized 1:1 by these stablecoins, with funds placed in Pareto’s credit vaults and lent to vetted institutional borrowers, generating yields. A protocol-funded stability reserve is established to buffer against borrower defaults. The synthetic dollar offers a regulated entry into real-world asset credit markets, addressing inefficiencies in traditional credit markets through enhanced transparency and risk management. Despite synthetic dollars being a small part of the stablecoin market, they drive innovation in fiat-pegged asset management. Stablecoins are recognized as crucial for supporting the US dollar's global reserve status, with ongoing regulatory interest to ensure their dominance in the financial landscape.
