Citrea unveils U.S. Treasury-backed stablecoin for its Bitcoin ecosystem

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Source: CryptoNewsNet Original Title: Citrea unveils U.S. Treasury-backed stablecoin for its Bitcoin ecosystem Original Link: Citrea, a layer-2 blockchain for Bitcoin, introduced a U.S. dollar-pegged stablecoin designed to serve as a liquidity standard on its ecosystem. Citrea uses zero-knowledge proofs, a cryptographic method that lets networks verify transactions without revealing all underlying data, to settle activity back to Bitcoin.

The Citrea USD (ctUSD) token is issued by Moonpay, a developer of financial payment infrastructure for crypto, which announced a stablecoin launchpad late last year. The token, backed 1:1 by short-term U.S. Treasury bills and cash, is its first.

Stablecoin liquidity remains a core bottleneck for Bitcoin-focused decentralized finance (DeFi), where capital often gets split across bridged versions of dollar tokens. That fragmentation can increase slippage for traders, reduce lending depth and amplify systemic risk when a single bridge or collateral asset fails. Citrea says it is trying to prevent that issue by issuing ctUSD natively.

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