US Banks Form Consortium for a Stablecoin Launch

Thursday, 13/01/2022 | 07:57 GMT by Arnab Shome
  • Four FDIC-insured banks have joined the consortium.
  • The stablecoins are minted on public Provenance Blockchain.
stablecoins

Four United States licensed banks have formed a consortium to launch a bank-minted stablecoin, called USDF. This, according to them, will challenge the stablecoins that are mostly non-bank issued.

Dubbed USDF Consortium, its founding members are New York Community Bank (NYCB), NBH Bank, FirstBank, Sterling National Bank and Synovus Bank. Two additional companies, Figure Technologies and JAM Fintop, will facilitate and promote the adoption of the upcoming stablecoin.

Additionally, Wednesday’s announcement highlighted that the consortium will grow the number of its FDIC-insured member banks throughout the year.

“USDF opens up endless possibilities for the expanding world of DeFi transactions,” said the CEO of Figure, Mike Cagney. “The ease and immediacy of using USDF for on-chain transactions was demonstrated this fall when NYCB minted USDF used to settle securities trades executed on Figure's alternative trading systems.”

Use of a Public Blockchain

The stablecoin will be minted only by the US banks and can be redeemed 1:1 for cash from any of the Consortium member banks. The consortium is using public Provenance Blockchain for issuing the stablecoin that will ensure peer-to-peer and business-to-business money transfers.

“This will solve a critical need to move funds on blockchain, and it does so in a way that can scale, adheres to regulatory standards and is acceptable to all users from large institutional investors to retail customers,” explained Andrew Kaplan, the Chief Digital and Banking as a Service Officer of NYCB.

“As a form of digital currency created and administered by regulated U.S. banks within the USDF Consortium, USDF will enable wide use of an on-chain real-time payments system that satisfies important principles of safety and soundness, compliance with anti-money laundering standards and financial stability.”

Four United States licensed banks have formed a consortium to launch a bank-minted stablecoin, called USDF. This, according to them, will challenge the stablecoins that are mostly non-bank issued.

Dubbed USDF Consortium, its founding members are New York Community Bank (NYCB), NBH Bank, FirstBank, Sterling National Bank and Synovus Bank. Two additional companies, Figure Technologies and JAM Fintop, will facilitate and promote the adoption of the upcoming stablecoin.

Additionally, Wednesday’s announcement highlighted that the consortium will grow the number of its FDIC-insured member banks throughout the year.

“USDF opens up endless possibilities for the expanding world of DeFi transactions,” said the CEO of Figure, Mike Cagney. “The ease and immediacy of using USDF for on-chain transactions was demonstrated this fall when NYCB minted USDF used to settle securities trades executed on Figure's alternative trading systems.”

Use of a Public Blockchain

The stablecoin will be minted only by the US banks and can be redeemed 1:1 for cash from any of the Consortium member banks. The consortium is using public Provenance Blockchain for issuing the stablecoin that will ensure peer-to-peer and business-to-business money transfers.

“This will solve a critical need to move funds on blockchain, and it does so in a way that can scale, adheres to regulatory standards and is acceptable to all users from large institutional investors to retail customers,” explained Andrew Kaplan, the Chief Digital and Banking as a Service Officer of NYCB.

“As a form of digital currency created and administered by regulated U.S. banks within the USDF Consortium, USDF will enable wide use of an on-chain real-time payments system that satisfies important principles of safety and soundness, compliance with anti-money laundering standards and financial stability.”

About the Author: Arnab Shome
Arnab Shome
  • 6571 Articles
  • 92 Followers
About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6571 Articles
  • 92 Followers

More from the Author

CryptoCurrency

!"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|} !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|}