Stablecoins Go Nuts: Inflation, Oil, and a Crypto Revolution

by

Finance

What to know:

  • USDi, the zany brainchild of Michael Ashton and Andrew Fately, is an inflation-linked stablecoin designed to guard your purchasing power rather than pretend to chase a boring nominal dollar.
  • Ashton shrugs and says stablecoins fixed payments, but forgot to provide a true store of value-crypto’s monetary system is still a head-scratcher with missing pages.
  • The token could let you tailor inflation hedges for health care and tuition, with insurers and institutions champing at the bit as early adopters.

As the Iran affair fizzes and the Strait of Hormuz behaves like a dramatic soap opera, oil prices skyrocket, and inflation becomes the talk of the town again-right between the commercials and the popcorn.

In the U.S., inflation sprinted to 0.9% last month, mostly fueled by energy costs from the Middle East tango; core inflation-excluding energy and food-surprisingly refused to be impressed. February’s headline nudge was a modest 0.3%.

For Michael Ashton, co-founder of USDi with Andrew Fately, these numbers underline a flaw in crypto’s grand monetary design-as if the blueprint forgot to include the staircase to value.

“The stablecoin boom has rebuilt only half the monetary system,” Ashton told CoinDesk in a chat that sounded suspiciously like a late-night infomercial. “Stablecoins solved the medium-of-exchange problem for crypto, but nobody solved the store-of-value problem. USDi is the first serious attempt to finish building the monetary system onchain.”

The $300 billion stablecoin market, ruled by dollar-pegged tokens, has become the plumbing for crypto trading and payments. But those tokens, backed by cash or Treasury bills, aim to keep a nominal $1, not preserve purchasing power. In real terms, Ashton argues, they’re losing value-like a mime trying to shout “inflation!”

“As stablecoins graduate from crypto-trading tools to real payment infrastructure, the store-of-value gap becomes a real institutional concern, not just a philosophical musing,” he said. “Treasurers, neobanks, and cross-border platforms holding float in stablecoins are quietly carrying inflation risk they probably haven’t priced.”

USDi

USDi is an earnest attempt to fill that very gap.

Instead of chasing the dollar, the token is designed to track inflation itself. Its value rises with the U.S. CPI, effectively making it a blockchain-native version of an inflation-protected principal.

Ashton describes USDi as closer to the principal value of Treasury Inflation-Protected Securities (TIPS), but without some of the surprises that have lately kept investors on their toes.

While TIPS offer inflation linkage, they’re still bonds, and their market price can dive when interest rates climb. USDi, by contrast, aims to behave more like an inflation-linked savings instrument.

The stablecoin’s reserves are parked in a low-volatility private fund called the Enduring U.S. Inflation Tracking Fund, which uses TIPS, U.S. Treasuries, 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.”

Oil-fueled inflation

Oil markets have been roller-coastering up since the Iran crisis kicked into gear. Prices jumped from the 80s to over 100 a barrel as fears about Hormuz disruptions gnawed at traders’ nerves, a classic case of drama over data.

Higher oil costs can push inflation higher by lifting transportation and production costs, which trickle down to shoppers as higher prices.

The moves have been a wild ride, with daily swings driven more by headlines than by brick-and-mortar fundamentals, as markets price in a lingering risk premium for potential supply disruptions.

“T-bills hover around 3.5%, inflation around 3%, but historically inflation has often outpaced short rates over longer stretches,” Ashton said. “We may be sliding back toward that comfortable chaos.”

The dynamic, he added, strengthens the case for an asset explicitly designed to track inflation rather than nominal yields.

Still, Ashton frames USDi as more than a clever trade. He sees it as a structural evolution in crypto, a way to finish the job Bitcoin started.

“Bitcoin was born as an alternative monetary system, maybe a store of value like gold. But its volatility makes that impractical in the near term. Stablecoins solved the payments side. Now we need to solve the store-of-value side.”

Customizable inflation exposure

Beyond its core design, USDi plans to introduce something Ashton swears is difficult to replicate in traditional finance: customizable inflation exposure.

CPI is itself a jamboree of categories-housing, health care, transportation, education-and USDi’s architecture could let users tailor exposure to specific inflation components.

“You don’t have to hold one generic basket,” he said. “You could isolate health-care inflation, tuition, or energy. You could even tailor it by geography: Dutch inflation, French inflation, U.S. core CPI.”

That flexibility opens up specialized uses, especially in industries facing direct inflation pressure.

Insurance companies, for example, tote inflation risk in medical costs but lack precise hedging tools. Traditionally, they’ve managed such risks by raising capital or transferring exposure through reinsurance or catastrophe bonds. But those tools are blunt-and sometimes rarer than a decent punchline.

“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 cut 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 uses include education financing. Some U.S. programs let families prepay tuition, effectively locking in prices. Ashton sees a tokenized inflation hedge as a more flexible alternative.

“Tuition is a classic inflation risk,” he said. “Being able to hedge that directly, that’s powerful.”

Fundraising

USDi is already up and running, with Ashton aiming for a seed raise of about $1.5 million in the coming months.

The broader pitch, however, is less about money and more about reframing how investors think about risk.

“You’re born with inflation risk,” Ashton said. “You’re not born with credit risk or equity risk.”

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2026-04-11 19:01