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Stablecoin DAI will not be pegged to USD alone: MakerDAO founder

Sahana Kiran

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Last month, MakerDAO rolled out its Multi-Collateral DAI [MCD] which is supported not just by Ethereum but also Brave’s Basic Attention Token [BAT], as opposed to its Single-Collateral DAI [SAI] which restricted its support to Ethereum alone. While this seems to be successful as the total DAI in circulation surpassed 50 million, the possibility of pegging DAI to other currencies than just the dollar comes into question. MakerDAO founder, Rune Christensen shed some light on the same in a recent podcast.

Christensen agreed with the same and suggested that considering what is best for the broader ecosystem and the overall stability was to not stick with just the United States dollar [USD]. Citing the reason behind his statement, Christensen said,

“Maybe the US dollar just stops being so dominant on a global scale or maybe there’s even US dollar hyperinflation. It could be any reason really. So there’s no reason why the governance of the system should be constrained by that.”

Christensen revealed that the idea is that, one-day DAI could transition away from being pegged to a single currency and would target a currency basket or even a CPI basket and further aim at becoming a global currency.

Furthermore, he pointed out why familiar or popular currencies should be pegged to the DAI as people would want to deal with something familiar while exploring the prospects of blockchain tech or DeFi. DAI is pegged to the USD for the same reason, he added. However, Christensen highlighted that it isn’t enough and they would have to go way beyond as the USD is a foreign currency for the Japanese or Europeans as well as for the other countries.

Highlighting future possibilities, Christensen said,

“So today we only have DAI, which is pegged to the US dollar, but in the future, we could have the Euro DAI, which we would be pegged to the Euro and Yen DAI pegged to Yen and maybe,we would have the US dollar DAI, that would be pegged to the US dollar and then DAI itself would then be picked a global basket.”

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Sahana is a full-time cryptocurrency journalist at AMBCrypto. A graduate in Political Science and Journalism, her writing is centered around regulation and policy-making regarding the cryptocurrency sector across geographies.