Announcing USDi…Inflation-Linked Cash
As many of you know, one of my goals in life – for decades – has been to expand the inflation-linked investing ecosystem to other structures (e.g. options), other legs of the liquidity triad (e.g. cash, swaps, futures), other more-specific inflation (e.g. medical care), and in every other way I could. Barclays originally moved me into the US CPI Derivatives seat not because they thought I’d be a tremendous trader (there was nothing to trade) but because they thought I’d be a good evangelist for the product. I’d like to think they were right. Certainly, I’ve been a durable one.
Over the years, through my time at Barclays and Natixis and Enduring, I’ve developed a lot of structured products – some which traded or were issued, but a lot that died on the drawing board or for lack of customer demand – and trading/hedging methods, funds, models, etc. But nothing, I think, is as impactful as what we’re announcing today. Because what we (at USDi Partners) are announcing is likely to be considered a security, I have to be somewhat careful about how I discuss this product. So, I am just going to post the press release, and let it speak for itself for now…although I would be remiss if I did not also refer to Elizabeth Stanton’s excellent article on Bloomberg (subscription required).
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USDi Partners Notes Launch of the USDi Coin, the First US Currency to Permanently Preserve Purchasing Power
Basking Ridge, NJ – April 15, 2025
USDi Partners today launched its first cryptocurrency project, which will allow investors to hold an asset that is permanently linked to the purchasing power a US Dollar had in December 2024.
The coin (an ERC-20 token on the Ethereum blockchain) will be available to accredited investors from market making firms that have passed USDi Partners’ AML/KYC process and are able to mint or burn the token directly. Once an investor buys a USDi coin with ‘normal’ dollars, the value of that coin will rise every day on the basis of the increase in the Not-Seasonally-Adjusted US Consumer Price Index for Urban Consumers, calculated and released by the US Bureau of Labor Statistics, which is the same index on which trillions of dollars’ worth of U.S. TIPS bonds are based.
A Coin that Always Buys What a Dollar Buys Today
Holding the USDi Coin will effectively be the same as holding a dollar whose purchasing power rises as the cost of goods and services increases. If the US CPI index rises 10% from the launch date, the value of a USDi Coin will be $1.10 in terms of the current dollar, so that the investor’s purchasing power is undiminished. “The idea for USDi was inspired by the Chilean Unidad de Fomento (UF), a non-circulating currency that since 1967 has been indexed to the price level in Chile. The UF is often used as the basis for contracts in Chile, allowing counterparts to agree on terms without worrying about how inflation will change the significance of the sums exchanged,” explained Michael Ashton, Co-Founder of USDi Partners. “But, unlike the UF, the USDi Coin will actually circulate.”
The USDi Coin is collateralized by reserves that are managed by an inflation-hedging specialist to keep up with inflation in both the short- and long-term. The Coin itself, however, will not fluctuate on the basis of investment returns but will always track US CPI exactly. (Because of the public release schedule of the CPI, the value of the USDi Coin on any given day will always be known from 2-6 weeks in advance.)
The CPI index on which the USDi Coin is based is calculated according to a publicly-available handbook of methods and released publicly, along with hundreds of subcomponents and regional indices, on the website of the Bureau of Labor Statistics. This makes it ideal for Phase 2 of the USDi project.
Finally, Medical Inflation (and Other Things) Will Be Investible
In Phase 2, the USDi Coin will become splittable, so that an owner of a USDi Coin will be able to divide it into subcomponents that track the inflation rate of individual parts of the consumption basket, and trade them separately. For example, upon the launch of Phase 2 it will be possible for the first time ever to invest in Medical Care CPI directly. This is an innovation beyond just crypto, says Andy Fately, Managing Partner and Co-Founder of USDi Partners. “What you have never been able to do before, but will when we launch Phase 2, is to buy a collateralized coin to track Medical Care or College Tuition inflation explicitly. This hasn’t even been done in the Trad Fi world, but the low frictions of the crypto world make it the ideal venue for this breakthrough.”
About USDi Partners
USDi Partners LLC was formed in mid-2024 following an off-mic discussion after recording an episode of Cents and Sensibility: the Inflation Guy Podcast. Michael Ashton asked Andy Fately and Susan Joseph, his guests on the podcast, whether anyone had created a coin that is stable in real space. The answer – no – set in motion a series of intense discussions about how best to do this in a way that was financially sound and regulatorily acceptable. USDi Partners was formed to offer and make markets in this new real-stable coin while it also expands its roster of partnered external market-makers in order to bring this innovation – and other future innovations – to the world.
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For more information:
Andrew Fately
***@usdicoin.com
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I am small/medium size organic livestock farmer. It sounds like this could be revolutionary.
I order materials and supplies months and years before I deliver a product. My operation is too large to ignore inflation risks but until now I always felt it was too small that anything could be done about it.
I am not well versed in crypto; if I understand you correctly then one by Phase 2 this is something that I, my vendors and my wholesale customers could use to mitigate inflation risks.
Is this the case or is this a product that will be limited to large investors, ETF, and all that high finance stuff?
It IS revolutionary!
Ideally, the financial advances that are made will be accessible to all. We know that’s not always the case: because Big Brother says you can’t make your own decisions, you can’t be allowed to invest in, say, hedge funds with great managers but have to invest via expensive products like ETFs and mutual funds.
But – the innovations do trickle down and I believe that once we are able to do these things in crypto …and once crypto regulation catches up with reality…then there will be products available to retail investors.
But even before that, you can write contracts in terms of these instruments. This is a bigger picture idea but I think there could/should be a bank that caters to this problem: what if you could buy your supplies priced in units of your output? A bank that could hedge the various inflation rates of your vendor supplies (raw materials, wages, etc) could broker a contract transaction where everyone’s risk was lower and the bank laid off the risks with high finance stuff. 🙂
I don’t promise that will happen in 2026! But you can’t score touchdowns if you never cross midfield. We are now crossing midfield.
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