Polkadot, a layer-1 blockchain, has launched dotUSD, a stablecoin operated through OpenGov governance by holders of the platform’s native token DOT.

The Defiant reported on Oct. 8 that dotUSD starts with a structure in which it is issued by depositing USDT on a 1-to-1 basis, with DOT-collateralised lending-based issuance to be pursued as a next step.

Polkadot said in its launch notice that dotUSD has no issuer. Initial collateral relies entirely on USDT.

Issuance and redemption are conducted through the on-chain peg stabilisation module, or PSM. Users can mint dotUSD by depositing USDT into the PSM reserve account. If they return dotUSD, the tokens are burned and they receive USDT minus a redemption fee.

Because initial reserves are in USDT, the possibility of control by Tether also remains. Tether’s terms give it the right to freeze tokens in cases such as legal requirements or violations of its terms.

OpenGov governance can adjust issuance and redemption fees, issuance limits, approved reserve assets and caps by asset. An authorised administrator can also stop minting or halt all swaps.

Other stablecoins are already on Polkadot. Circle launched native USDC on Asset Hub in September 2023. Hydration’s HOLLAR, launched in September 2025, supports loans collateralised by DOT, ETH, vDOT, USDT, USDC, tBTC and WBTC, among others.

The next stage for dotUSD is expected to include DOT-collateral vaults, price oracles, stability pools and liquidation mechanisms.