Pareto, a private credit platform, has launched a new synthetic digital dollar aimed at helping large-scale investors explore crypto-backed lending.
Being a synthetic dollar means that the new token, called USP, is not traditional cash. Instead, it matches the value of the U.S. dollar. According to Pareto, private loans to vetted companies back USP, using real-world credit rather than just crypto.
$USP the credit-backed synthetic dollar is now LIVE!
The wait is over! Meet $USP, a new type of synthetic dollar that gives users access to a diversified basket of institutional credit lines. Backed by RWA institutional lending, not by speculative assets.
Stake it. Compose it… pic.twitter.com/Dr4ZUAZYRj
— Pareto (prev Idle) (@paretocredit) May 15, 2025
Pareto noted that users would need to deposit stablecoins like USDC to get USP. These stablecoins serve as collateral. Pareto then lends that money to borrowers, generating returns for users.
How does this work?
The company says the USP token is fully backed and that a built-in reserve helps protect users in case of loan defaults. In addition, the company said it also built in a system that supports USP’s dollar value with checks on supply and demand.
Unlike most of traditional stablecoins, $USP is:
• Credit-backed: secured by on-chain loans to institutional borrowers
• Composable: integrates seamlessly across DeFi
• Diversified: not tied to a single vault or borrower
• Regulatory-compliant: built with KYC and… pic.twitter.com/Hq8eN275Si— Pareto (prev Idle) (@paretocredit) May 15, 2025
This launch is part of a growing trend of using blockchain technology to bring traditional financial markets, like private lending, into the crypto space. It also highlights the rising role of stablecoins in modern finance.
While synthetic dollars like USP are still a small part of the overall stablecoin market, they’re gaining interest, especially from institutions looking for new ways to earn yield. However, some experts have warned about the risks of mixing crypto with complex credit markets.
Pareto says it’s tackling this by keeping everything on-chain, meaning transactions and risks can be tracked in real time.
The company said in a statement, “By bringing private credit onchain, we enable real-time transparency, programmable risk management, and automated settlement while reducing counterparty risk and operational friction.”
$USP holders can stake their tokens into sUSP to earn native yield from Pareto’s Credit Vaults.
Yield is sourced from real-world institutional strategies, offering a consistent, risk-adjusted income stream. It’s structured for capital-seeking stability, transparency, and real… pic.twitter.com/gCXg3qAPjH
— Pareto (prev Idle) (@paretocredit) May 15, 2025
US continues push for stablecoin regulation
With interests in stablecoins reaching new heights, regulators in the US are working towards regulating the asset. Recent reports note that U.S. lawmakers are getting closer to passing the GENIUS Act, a bill that will set the foundation for how stablecoins are regulated.
https://t.co/D8k7f2MiTE pic.twitter.com/lqgSCOJGOb
— Eleanor Terrett (@EleanorTerrett) May 15, 2025
The senate is currently going through a revised version of the bill. The updates focuses on protecting users, blocking fraud, and limiting how large tech companies can launch stablecoins. This means companies like Meta or Amazon won’t be able to issue their stablecoins unless they meet strict government standards.
The new draft also includes penalties for misleading marketing, such as suggesting that the US government backs a coin.
Disclaimer
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