Group of US banks intend to launch their stablecoin

Thursday 13 January 2022 10:02 CET | News

A group of US banks have announced that they intend to launch their own stablecoin, called USDF, hoping to tackle concerns about the reserves behind nonbank issued equivalents.

The group – which is made up of institutions backed by the Federal Deposit Insurance Corp. (FDIC) – said the coin should address the consumer protection and regulatory concerns of nonbank issued stablecoins.

The five founding community bank members are New York Community Bank (NYCB), NBH Bank, FirstBank, Sterling National Bank, and Synovus Bank. Figure Technologies, which founded the Provenance Blockchain, and community bank group JAM FINTOP are also consortium founders promoting the adoption of the stablecoin that uses Provenance.

To participate in the consortium, member banks have to be FDIC insured, have at least USD 1 billion in assets, possess a satisfactory credit rating, and have staff to deal with Bank Secrecy Act and AML compliance. Depending on a bank’s assets, membership costs between USD 20,000 and USD 50,000.

USDF was first mentioned in September 2021, but at that point, the banks avoided the use of the term stablecoin.

USDF will be a bank-minted alternative to USDT and Circle’s USD coin (USDC), which account for the lion’s share of the USD 170 billion stablecoin market. 

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Keywords: banks, product launch, stablecoin, regulation, partnership
Categories: Blockchain & Cryptocurrencies | Cryptocurrencies
Countries: United States
This article is part of category

Blockchain & Cryptocurrencies