Dollar-Pegged Stablecoins Are Quietly Hemorrhaging Purchasing Power—USDi Wants to Stop the Bleeding

As oil shocks revive investor anxiety, stablecoins solved payments, but left crypto holding a bag of purchasing power erosion. Enter USDi.

The token, co-founded by Michael Ashton and Andrew Fately, is an inflation-linked stablecoin designed to preserve purchasing power rather than track a nominal dollar. Ashton argues stablecoins solved the medium-of-exchange problem for crypto, but nobody solved the store-of-value problem—leaving crypto's monetary system with a half-baked monetary architecture, like building a house but forgetting the roof.

The $300 billion stablecoin market, dominated by dollar-pegged tokens, has become essential plumbing for crypto trading and payments. But those tokens, typically backed by cash or Treasury bills, are designed to hold a nominal value of $1, not preserve purchasing power. In real terms, Ashton argues, they are quietly bleeding value faster than a degen who just discovered leverage.

"As stablecoins graduate from crypto-trading tools to genuine payment infrastructure, the store-of-value gap becomes a real institutional concern, not just a philosophical one," he said. "Treasurers, neobanks, and cross-border payment platforms holding float in stablecoins are quietly taking inflation risk they probably haven't priced—kind of like agreeing to a poker game without checking if the house has been stacking the deck."

Oil-fueled inflation

As the war with Iran and the closure of the Strait of Hormuz send oil prices higher, inflation is once again at the forefront of investors' minds. In the U.S., inflation accelerated last month to 0.9%, driven mostly by energy costs linked to the Middle East conflict. Oil markets have been on a sharp and volatile upswing since the outbreak of the Iran war in late February. Prices initially jumped into the $80s before rapidly breaking above $100 a barrel as fears mounted over disruptions to the Strait of Hormuz, a key artery for roughly 20% of global supply.

"T-bills are around 3.5%, inflation is around 3%, but historically, inflation has often outpaced short rates over longer periods," Ashton said. "We may be returning to that pattern—because apparently, the economy enjoys gaslighting savers every few decades."

How USDi works

USDi is designed to track inflation itself, with its value increasing in line with changes in the U.S. Consumer Price Index (CPI). Ashton describes it as a blockchain-native version of an inflation-protected principal, closer to the principal value of Treasury Inflation-Protected Securities (TIPS), but without some of the drawbacks that have caught investors off guard in recent years.

While TIPS offer inflation linkage, they are still bonds, meaning their market price can fall when interest rates rise. USDi aims to function more like an inflation-linked savings instrument. The stablecoin's reserves are invested in a low-volatility private fund called the Enduring U.S. Inflation Tracking Fund, which uses TIPS, U.S. Treasury debt, foreign exchange, and commodity futures and options to generate return.

"There isn't really an inflation-protected savings account," Ashton said. "That's the gap we're trying to fill."

Customizable exposure

Beyond its core design, USDi plans to introduce something Ashton says is difficult—or impossible—to replicate in traditional finance: customizable inflation exposure. CPI itself is a composite of multiple categories, including housing, health care, transportation, and education. USDi's architecture could eventually allow users to tailor exposure to specific components of inflation.

"You don't have to hold one aggregate basket," Ashton said. "You could isolate health-care inflation, or tuition, or energy. You could even tailor it by geography: Dutch inflation, French inflation, U.S. core CPI."

That flexibility allows for more specialized applications, particularly in industries with direct exposure to specific cost pressures. Insurance companies, for example, face inflation risk in areas like medical costs but lack precise hedging tools—kind of like trying to play whack-a-mole blindfolded while the moles multiply.

"There's never really been a direct hedge for something like health-care inflation," Ashton said. "If you can hedge that exposure more precisely, you can reduce the capital you need to hold, or expand the amount of business you can underwrite."

He expects insurers and reinsurers to be among the earliest institutional adopters in a second phase of USDi's rollout. Other potential applications include education financing, where tuition is described as a classic inflation risk—because nothing says "fun financial planning" like watching college costs outpace everything except crypto drawdowns.

The broader pitch

Ashton frames USDi as more than a tactical trade. He sees it as a structural evolution in crypto, one that completes the system bitcoin began—finally giving the ecosystem the macroeconomic utility it pretended it didn't need while mooning on purely speculative narratives.

"Bitcoin was conceived as an alternative monetary system, and potentially as a store of value like gold," he said. "But its volatility makes it difficult to use that way over shorter horizons. Stablecoins solved the payments side. Now we need to solve the store-of-value side."

USDi is already up and running, with Ashton targeting a seed raise of around $1.5 million in the coming months. The broader pitch is