A group of US-based banks are launching their own stablecoin, USDF. The stablecoin will be issued by the USDF Consortium, which will allow its members (financial and banking institutions) to issue USDF. The proposed stablecoin will be the first such currency to be minted by FDIC-insured institutions and comply with recommendations on the use of stablecoins made by the President’s Task Force.
USDF Consortium Launches Stablecoin
The USDF Consortium, a membership-based group of banks, launches the first bank-issued stablecoin, also known as USDF. According to a press release published on January 12, the goal of this release is to remove friction by addressing “consumer protection and regulatory concerns for non-bank stablecoins and to provide a more secure option for making transactions. transactions on the blockchain”.
The USDF Consortium is the entity that will authorize these banks to mint the stablecoin, which will be redeemable 1:1 in cash at any of the aforementioned consortium banks. The founding members of this consortium include institutions such as New York Community Bank (NYCB), NBH Bank, Firstbank, Sterling National Bank and Synovus Bank. Figure Technologies, Inc. and Jam Fintop are also founding members.
Defi targeting, payouts and settlements
Stablecoins are a big part of what decentralized finance is right now, and the USDF consortium is targeting this area with development. Figure CEO Mike Cagney said:
The USDF opens up endless possibilities for the expanding world of DeFi transactions.
Figure’s systems have previously used the USDF to settle securities transactions involving the New York Community Bank. Andrew Kaplan, Head of Digital and Banking as a Service at NYCB, highlighted the importance of this launch for moving compliant funds using modern blockchain services. According to the executive, the goal is to do things “in a way that can scale, meet regulatory standards and be acceptable to all users, from large institutional investors to retail clients.”
This is one of the first attempts by a bloc of banks to offer an alternative solution to the stablecoins that are already on the market, taking into account the recommendations on the use of stablecoins by the president’s task force. Stablecoins have become one of the sectors of the crypto industry with notable growth, surpassing the market capitalization of $100 billion. USDT, the token issued by Tether, dominates nearly half of the market cap in this category.
The New York Community Bank will hit the on-demand stablecoin in the coming weeks, according to Cagney.
What do you think of the launch of the USDF? Tell us in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
Warning: This article is for informational purposes only. This is not a direct offer or the solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.