A group of US banks are launching their own USDF stablecoin. The stablecoin is issued by the USDF consortium, which enables its members (financial and banking institutions) to issue USDF. The proposed stablecoin will be the first currency of its kind to be minted by FDIC-insured institutions and in line with the recommendations of the president’s working group on the use of stablecoins.
USDF consortium introduces stablecoin
The USDF Consortium, a membership-based group of banks, launches the first bank-minted stablecoin, also known as the USDF. According to a press release released on Jan. 12, the aim of this release is to remove friction by “addressing consumer protection and regulatory concerns about non-bank stablecoins and providing a safer option for transactions over the blockchain.”
The USDF consortium is the authority that authorizes these banks to mint the stablecoin, which can be redeemed 1: 1 in cash by any of the banks in the above-mentioned consortium. 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.
Targeting defi, payments and billing
Stablecoins are a huge part of what decentralized funding is all about right now, and the USDF Consortium is targeting this area with development. Figure CEO Mike Cagney said:
USDF opens up endless possibilities for the expanding world of deFi transactions.
Figure’s systems have previously used USDF to process securities transactions in which New York Community Bank is involved. Andrew Kaplan, NYCB’s Chief Digital and Banking as a Service Officer, noted the importance of this rollout in moving compliant funds using modern blockchain services. According to management, the goal is to “be able to scale things, 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 banking bloc to propose an alternative solution to the stablecoins already on the market, taking into account the recommendations of the President’s working group on the use of stablecoins. Stablecoins have become one of the sectors in the crypto industry with remarkable growth, exceeding the market cap of $ 100 billion. USDT, the token issued by Tether, dominates almost half of the market capitalization in this category.
According to Cagney, the New York Community Bank will mint the stablecoin on demand in the next few weeks.
What do you think of the introduction of USDF? Let us know in the comments section below.
Sergio Goschenko
Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late in the game when he entered the cryptosphere in December 2017. He has a computer engineering background, lives in Venezuela and is socially affected by the cryptocurrency boom about crypto success and how he is helping the non-banks and the underserved.
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