US banks plan new stablecoin

A group of US banks has plansto launch a major stablecoin together. This should be the designation USDF receive. The aim of this initiative is, among other things, to dispel the doubts that are raised about other stablecoins regarding the reserves with their own stablecoin. Founding members of the USDF Consortium include Synovus (the 48th largest bank in the US by assets according to MX Technologies), the New York Community Bank (No. 45), the FirstBank (No. 88) and the Sterling National Bank (No. 77). They are secured by the Federal Deposit Insurance Corp. (FDIC), one of the key regulators in the industry.

The consortium would also like to persuade other financial institutions to join.

USDF are minted exclusively by US banks and are exchangeable at a 1:1 ratio for cash from a consortium member bank. USDF addresses the consumer protection and regulatory concerns that exist with unbanked stablecoins and offers a more secure option for transacting on the blockchain

, the statement said.

USDF runs on public Provenance blockchain

The banks will operate the stablecoin USDF on the public Provenance blockchain. The availability of USDF on a public blockchain brings some advantages. For this reason, banks and their customers can use the stablecoin for a wide range of other applications in addition to peer-to-peer and business-to-business money transfers. These scenarios include, for example, capital call or invoice and supply chain financing.

However, the notice leaves out whether the reserves for the USDF are also backed by the FDIC. In the case of Tether in particular, there have been multiple concerns about the opaque nature of stablecoin backing.

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US banks plan new stablecoin