There is a strange phenomenon in the stablecoin sector: most of the top ten stablecoins by market capitalization are just circulating in exchanges and DeFi protocols, while the actual usage for payments, cross-border remittances, and daily consumption is pitifully low. Although USDT has a large volume, can you use USDT to buy things at convenience stores? No. Is it convenient to use USDT to send money to overseas relatives? No, it isn't. Because after the recipient receives it, they still have to find a way to exchange it for fiat currency, making the entire process not much simpler than traditional finance.
USDD has been doing the following lately: transforming stablecoins from trading tools into real payment methods. Moreover, the entry point they chose is particularly smart, as they are not competing head-on with giants like VISA and Mastercard but are instead targeting markets where traditional financial services are lacking, such as India, Southeast Asia, and Web3 social networks.
On December 12, India’s largest exchange, CoinDCX, launched a financial product for USDD with an annualized rate of 8% and flexible access. This product may not sound particularly special, but you have to understand that India has a population of 1.3 billion, with hundreds of millions lacking bank accounts or having only basic savings accounts. Traditional banks offer them pitiful interest rates, possibly only 3-4%, and there are various withdrawal restrictions.
CoinDCX has a high penetration rate in India. It is not just an exchange; it is more like an entry point for Indian users to access cryptocurrency. USDD's choice to collaborate with it means directly reaching India's mainstream user base, and the 8% yield is hugely attractive to Indian users, significantly higher than what they could earn from bank deposits.
More critically, USDD's stability is significant. The Indian rupee has depreciated considerably in recent years, and many middle-class individuals are trying to allocate dollar assets. However, the Indian government has strict foreign exchange controls, making it very difficult for ordinary people to exchange for dollars. USDD provides a workaround; using rupees to buy USDD is equivalent to holding dollar-pegged assets, which can protect against local currency depreciation while also earning interest.
This scenario has stronger demand in regions like Latin America and Southeast Asia, where currencies are unstable. In countries like Venezuela and Argentina, local currencies have inflation rates that can reach double or even triple digits, and the wealth of ordinary people is shrinking daily. Stablecoins are not speculative tools for them, but a lifeline. If USDD can establish a foothold in these markets, the potential is enormous.
The partnership with CoinDCX has a deeper significance in that it proves USDD's compliance capabilities. India's regulatory policies on cryptocurrency have been tightening, and there were rumors of a complete ban a couple of years ago. Although it ultimately was not fully banned, exchanges face significant compliance pressure. CoinDCX's willingness to launch USDD indicates that USDD has done a reasonably good job of preparing for compliance, at least passing the exchange's risk control review.
Another interesting move is the collaboration with UXLINK. UXLINK is a Web3 social platform that focuses on using crypto wallets for social networking. Users can create groups, send messages, and share content on the platform. It sounds similar to traditional social software, but the core difference is that all social interactions can be tied to on-chain assets.
For example, when you send a red envelope to a friend on UXLINK, you can do it directly with USDD, without needing to bind a bank card or undergo real-name authentication, and it arrives instantly. Cross-border transactions are also no problem; it doesn't matter if the recipient is in the United States or the Philippines. This experience is something that WeChat and Alipay cannot provide, as they are limited by the boundaries of the traditional financial system.
UXLINK is also trying to incentivize content creation with tokens. High-quality content posted by users can receive rewards, which are settled in USDD. Users can then spend or withdraw directly on the platform. If this model proves successful, it will essentially integrate social media and payment systems, with USDD playing the role of circulating currency in this ecosystem.
This socialized payment scenario is actually where stablecoins should focus their efforts. However, most stablecoins are competing for yields in DeFi, and no one is willing to spend time educating users, connecting with merchants, or solving those cumbersome payment processes. USDD is willing to invest resources in this area, showing that their strategic vision extends beyond the current DeFi market.
Cross-border remittances are another area where USDD is making efforts. Traditional cross-border remittances are slow, expensive, and complicated. Companies like Western Union can charge up to 10%, and bank wire transfers can cost dozens of dollars. The fastest delivery time is usually 1-3 days. For those who rely on overseas work to support their families, these costs and times are significant burdens.
USDD has integrated with payment gateways such as AEON Pay and Uquid. Theoretically, users can pay with USDD at 20 million merchants in Southeast Asia. Although the actual number of users may not be high yet, the infrastructure is already set up. The key now is promotion and user education.
I saw someone share their experience of using USDD to remit money from Singapore to their family in the Philippines. The whole process goes like this: they first exchange new coins for USDD on Binance or HTX, then transfer it to their family via the TRON wallet, with fees only costing a few cents and arriving in minutes. After receiving USDD, the family exchanges it for Philippine pesos at a local exchange. The entire process costs less than 1%, which is ten times cheaper than Western Union.
While this use case has not yet been widely promoted, the direction is correct, and as USDD becomes compliant in more regions, the potential of this scenario will grow. The Philippines receives over $30 billion in overseas remittances annually. If USDD can capture even 1% of that market, it amounts to several hundred million dollars.
On the DeFi side, USDD's combination of gameplay is becoming increasingly rich. Recently, Uniswap launched liquidity mining incentives for USDD and sUSDD, with total rewards exceeding $75,000. This event attracted many Ethereum users to provide liquidity. By pairing USDD and USDT and putting them into the pool, you can earn trading fees plus mining rewards, with an overall annualized return of 15-20%.
But truly savvy users won't stop there. They will use leverage to amplify their returns, for instance, by collateralizing TRX on JustLend to mint USDD, then converting USDD into sUSDD for base returns, while also providing liquidity with sUSDD on Uniswap. This way, they retain exposure to TRX while achieving dual returns with USDD and participating in liquidity mining.
This multi-layered nested strategy is common in DeFi, but it requires the underlying assets to be stable enough and the liquidity to be good enough. USDD has performed well in both aspects. On-chain data shows that USDD's PSM module is handling minting and redemption daily, ensuring price stability, while the trading depth of USDD on major DEXs is also steadily increasing.
Another point that many people overlook is the interest rate arbitrage of USDD across different chains. For example, the cost of minting USDD on TRON is very low, with a stable fee rate of only 0.5-1%. Then you can bridge these USDD to Ethereum and participate in high-yield pools on Curve or Aave. The interest rate spread in between could be 5-10 percentage points. After deducting bridging costs and gas fees, you can still save quite a bit.
Of course, this strategy carries risks, primarily related to the security of cross-chain bridges. However, USDD, being natively deployed, does not need to go through traditional cross-chain bridges, making it significantly safer. You can redeem USDD on TRON and then mint new USDD using USDT through PSM on Ethereum. Although this adds a step, it completely avoids the risk of bridges.
From the perspective of ecosystem development, USDD has recently been conducting content creation activities. The winners of Phase 5 have just been announced. These activities may look like marketing, but they are actually building community culture, allowing users to participate, share their usage experiences and strategies. These real use cases are much more useful than official promotions.
On December 16, there will be an AMA discussing the security architecture and revenue mechanism of USDD. Regular community communication like this is essential as it lets users know what the team is thinking, what they are doing, and what new plans they have, rather than just working in silence until problems arise, leaving users unaware.
From a timeline perspective, USDD has managed its pace quite well over the past few months. In September, it was natively deployed on Ethereum, October saw the launch of the Treasury Dashboard, November involved a collaboration with UXLINK, and in December, CoinDCX launched financial products. There has been a new move every month, and these actions are logical, not random.
The deployment on Ethereum is to open up the DeFi market, the Dashboard is to build trust, UXLINK is to explore social payments, and CoinDCX is to enter emerging markets. When you connect these points, you will find that USDD is constructing a multidimensional network of usage scenarios.
The core of this network is to transform USDD from a purely DeFi tool into a real currency. What is a currency? It is something you can use to buy things, save and earn interest, transfer to friends, and make cross-border payments. USDT has only achieved part of this, while USDD is trying to do the whole set.
Of course, this path is not easy. Expanding payment scenarios requires connecting with a large number of merchants and service providers, resolving compliance issues, and educating users. These are all labor-intensive tasks, and explosive growth is not visible in the short term. But if successful, the moat will be very wide.
Currently, the stablecoins available in the market are either centralized ones like USDT and USDC, relying on scale and first-mover advantage, or purely DeFi ones like DAI and USDe, attracting users with yields. USDD is taking a middle path, offering both DeFi yields and exploring real-world scenarios. This positioning is quite unique.
From user feedback, USDD provides a good experience in actual applications, with fast transfers and low fees. Additionally, due to multi-chain deployment, users can choose the chain that suits them best: use TRON for low costs, Ethereum for DeFi combinations, or BNB Chain for high performance. This flexibility is something that single-chain stablecoins cannot offer.
If USDD can make further strides in the payment sector, such as collaborating with a major e-commerce platform or obtaining a payment license in a certain country, the whole narrative will be even more complete. The ultimate form of a stablecoin should seamlessly integrate into daily life rather than just be confined to exchanges and DeFi protocols. USDD is working towards this direction.
