USD.AI vs USD1 - Key Differences
2025-08-26
Stablecoins are digital currencies designed to stay the same value as the U.S. dollar. They are important in the crypto world because they help people trade without worrying about big price changes. However, not all stablecoins are the same.
Two projects that have gained attention recently are USD.AI and USD1. While both are tied to the U.S. dollar, they serve very different purposes. One focuses on helping artificial intelligence (AI) companies, while the other is built for large financial institutions.
This article will break down the key differences between USD.AI and USD1 in simple terms so you can understand how they work and who they are made for.
Focus and Use Case
The main difference between these two stablecoins is their purpose.
USD.AI is built for the AI industry. It allows AI companies to use their GPUs (graphics cards) as collateral to borrow money. GPUs are very important in AI development, so this project helps AI startups access funds without giving up their hardware.
USD1 is designed for banks, hedge funds, and governments. It focuses on regulation, compliance, and cross-chain payments. In other words, it is meant to be a safe, rule-following stablecoin for big institutions.
Read Also: The Banking Sector Adopts More Stablecoins: Projections
Collateral Type
Collateral means what is backing up the stablecoin’s value.
USD.AI uses GPUs as collateral. This is unique because most stablecoins do not use computer hardware to back their value. If an AI company has powerful GPUs, they can lock them in the system to receive loans.
USD1 uses traditional financial assets such as the U.S. Treasury bonds, bank deposits, and cash. This makes it more familiar to regulators and traditional finance players.
Tokens Issued
Another big difference is the number of tokens each project issues.
USD.AI has two tokens:
USDai: a stablecoin pegged 1:1 to the U.S. dollar.
sUSDai: a yield-bearing token that earns income from AI computing.
USD1 has only one token, called USD1, which is pegged 1:1 to the dollar.
This means USD.AI has a more complex system, while USD1 keeps it simple.
Read Also: Where and How to Buy USD1? The Most Concise Guide
Funding and Backing
The funding behind these projects also tells a different story.
USD.AI raised $13.4 million in Series A funding, led by Framework Ventures. This shows strong support from the DeFi and AI community.
USD1 is reported to have a massive $2 billion investment deal with Binance and MGX. It is also politically supported by Donald Trump and his family, making it highly visible in global discussions.
Unique Features
Each project comes with its own unique set of tools and benefits.
USD.AI
GPU-backed loans for faster approval.
A two-token system that balances stability and yield.
A game-based ICO (Initial Coin Offering) to attract early users.
USD1
Full regulatory transparency through Chainlink Proof of Reserves.
Zero fees for minting and redemption.
Cross-chain transactions via Chainlink CCIP.
Built for strong institutional infrastructure.
Read Also: Key Crypto Regulation Bill to Impact Stablecoins and DeFi
Target Users
The users of each stablecoin are also very different.
USD.AI targets AI startups, developers, and DeFi users who want new ways to borrow and earn money.
USD1 targets banks, hedge funds, and even governments, focusing on institutions that need compliance and stability.
Regulation and Status
Regulation plays a huge role in the future of stablecoins.
USD.AI is still finding its way in terms of regulation. Since it mixes DeFi and AI, it operates with cautious optimism but is not fully regulated yet.
USD1, on the other hand, is fully regulated. It provides custodial safety, real-time reserve verification, and focuses on compliance. This makes it more appealing to large, traditional financial players.
Read Also: Best Stablecoin Use Cases For Global Payments in 2025
Conclusion
Both USD.AI and USD1 are stablecoins tied to the U.S. dollar, but they serve very different groups:
USD.AI is experimental, creative, and built for the fast-growing AI sector. It uses GPUs as collateral and supports startups that need new financial tools.
USD1 is institutional, political, and heavily regulated. It focuses on compliance, transparency, and serving global financial institutions.
If you are an AI startup or DeFi user, USD.AI might catch your interest. But if you are a bank or large financial organisation, USD1 is the more suitable choice.
Follow Bitrue, the best advice is to play carefully, study charts, and always stay safe.
FAQ
What is the main difference between USD.AI and USD1?
USD.AI is built for AI companies using GPUs as collateral, while USD1 is for institutions and backed by traditional assets.
Is USD.AI regulated?
Not fully. USD.AI is still working in a new area that mixes DeFi and AI.
Can individuals use USD1?
USD1 is mainly for institutions like banks and hedge funds, not everyday retail users.
Why does USD.AI issue two tokens?
It issues USDai for stable value and sUSDai for earning yield from AI computing power.
Disclaimer: The content of this article does not constitute financial or investment advice.
