DOT holders authorized the stablecoin through OpenGov, and Polkadot says it has no issuing company, but the live phase mints only against Tether's USDT and an administrator can stop minting or halt swaps outright. DOT collateral, price oracles and liquidations are planned for a later stage.
Polkadot launched a native stablecoin called dotUSD on October 8, and for now every unit of it is backed by Tether's USDT. The token runs on Polkadot Hub, and DOT holders authorized it through the network's OpenGov process rather than a company board.
The authorizing vote was OpenGov Referendum 1944, which reports of the governance record put at about 98.4 percent support on roughly 4.3 million DOT. An earlier stage of the same referendum in September drew 97.6 percent support on about 2.39 million DOT, and the Polkadot Community Foundation submitted the proposal. The referendum also approved a DOT-dotUSD liquidity pool and treasury funding to seed early trading, with no amount given in the coverage.
Minting runs through a peg stability module. A user deposits USDT into the module's reserve account and receives dotUSD one for one. Returning dotUSD burns it and releases USDT, less a redemption fee. An initial cap limits how much dotUSD can exist, and none of the coverage states the figure. Holding dotUSD does not require keeping DOT in the same account, and minting it takes no DOT either.
Polkadot presents the USDT phase as a bridge while the fuller collateral system is finished. Because the reserve is a dollar-denominated token rather than a volatile one, there is nothing to liquidate and no price feed that could misprice the collateral, and the live phase needs neither oracles nor liquidation rules. That is a narrower failure surface than a crypto-collateralized stablecoin carries, and a different one.
Polkadot describes dotUSD as having no issuing company, with DOT holders setting the parameters an issuer would normally control. Those parameters are substantive. OpenGov can change issuance and redemption fees, raise or lower the supply cap, add or remove approved reserve assets and set per-asset limits. An authorized administrator can also stop minting or halt swaps altogether, a control that exists whatever the governance arrangement sitting above it.
What governance does not reach is the reserve itself. USDT is issued by Tether, whose terms allow it to freeze tokens for legal reasons or for breaches of those terms, and the company uses that power. Conduit Technology sued Tether this month over $2.76 million it says has sat frozen since September 2025, and two Thai businessmen brought a $42.4 million claim on much the same theory five weeks before that. A freeze that reached the reserve account would not be a governance decision, and OpenGov would have no vote on it.
The second phase is where DOT itself comes in, and it has not shipped. Polkadot plans vaults that let holders lock DOT and mint dotUSD against it, which requires the machinery the first phase skips: price feeds, liquidations and a stability pool. Borrowers would set their own interest rates, with lower-rate vaults redeemed first, a structure drawn from Liquity v2's BOLD. Until that exists, dotUSD is in effect a USDT wrapper whose terms are set by governance.
Polkadot already had dollar options on the network. Circle launched native USDC on Asset Hub in September 2023, and Hydration's HOLLAR, live since September 2025, lends against several assets including DOT and USDT. What distinguishes dotUSD at this stage is the governance route rather than the collateral behind it.
The question of who holds the controls is not unique to Polkadot. Cardano put freeze and seizure powers into its ledger this month for issuers that adopt a new token standard, on the reasoning that compliance logic belongs inside the asset. dotUSD takes the other route and puts the controls in governance, while holding a reserve asset whose own issuer kept them.
