Alpen Labs launches Bitcoin-backed stablecoin with $1 peg

Alpen Labs has introduced the Bitcoin dollar (BTD), a stablecoin backed entirely by Bitcoin (CRYPTO:BTC) and pegged to the U.S. dollar.

The new stablecoin operates on Alpen Labs’ zero-knowledge (ZK) rollup, a layer two Bitcoin scaling solution designed to reduce trust dependencies.

BTD is over-collateralised, meaning users lock Bitcoin as collateral to mint the stablecoin using Liquity V2’s borrowing protocol.

This protocol does not require governance tokens or upgradeable code, aiming to maintain immutability and decentralisation.

According to Alpen Labs, BTD’s smart contracts are immutable after deployment, and the system avoids centralised intermediaries, aligning with Bitcoin’s decentralised ethos.

Unlike many existing stablecoins, BTD does not rely on speculative tokens or administrative control.

However, it depends on third-party oracles for BTC/USD price feeds, and Alpen Labs plans to mitigate oracle risk by aggregating data from multiple sources.

Developers can test BTD on Alpen’s upcoming testnet, which will support decentralised lending and trading applications.

The testnet also seeks to integrate with Bitcoin’s emerging payment technologies such as Taproot Assets and Fedimints.

“Bitcoin is the most trusted digital asset, yet its financial ecosystem often compromises its principles,” said David Seroy, Head of Ecosystem at Alpen Labs.

“BTD is the stablecoin Bitcoin deserves—a neutral, immutable protocol that empowers users while upholding decentralisation. This is the foundation for a truly free financial system,” he added.

The launch of BTD represents an effort to create a censorship-resistant stablecoin alternative that adheres closely to Bitcoin’s core principles.

At the time of reporting, the Bitcoin (BTC) price was $102,976.