BitMEX co-founder Arthur Hayes believes that the crypto industry’s fallout with major banking partners calls for the creation of a new kind of stablecoin.

In a March 9 blog post, Hayes proposed the “Satsoshi Nakamoto Dollar” or NakaDollar (NUSD) – a stablecoin that would be backed by Bitcoin and an inverse Bitcoin perpetual swap. 

Instead of relying on the custody of fiat banks for tokenization, NUSD would be supported by crypto exchanges that list these Bitcoin derivatives. However, Hayes opined that only centralized exchanges would be able to facilitate this, seeing as their decentralized counterparts are “nowhere near as liquid.”

The first step in bringing NUSD to life would be to create a decentralized autonomous organization (DAO), complete with its own governance token NAKA. The purpose of this would be to secure a funding pool for the initial stock of NUSD supply. Both NAKA and NUSD would be ERC-20 tokens on the Ethereum blockchain. 

“If this solution were embraced by traders and exchanges, it would lead to a large growth in Bitcoin derivatives open interest, which would in turn create deep liquidity,” said Hayes. 

According to research from Kaiko, stablecoins could take on a larger role in the crypto economy as existing fiat payment rails dwindle. Most recently, one of the industry’s most widely used banking partners Silvergate said it was winding down operations in a voluntary liquidation. (CEO of Custodia Bank Caitlin Long shared what she thinks Silvergate’s demise means for crypto and banking on Unchained.)

Analysts at Kaiko opined that in this new post-Silvergate environment, traders would deposit dollars with stablecoin issuers instead of centralized exchanges.

“The problem is, though, that stablecoin issuers still need access to a crypto bank, so the risk is now further concentrated,” they said.