A group of U.S.-based banks is 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 currency of its kind to be minted by FDIC-insured institutions and compliant with the recommendations on the use of stablecoins made by the president’s working group.
USDF Consortium to Launch Stablecoin
The USDF consortium, a membership-based group of banks, is launching the first bank-minted stablecoin, also called USDF. According to a press release issued on January 12, the objective behind this release is to remove friction by addressing “the consumer protection and regulatory concerns of non-bank issued stablecoins and offer a more secure option for transacting on blockchain.”
The USDF consortium is the entity that will authorize these banks to mint the stablecoin, which will be redeemable 1:1 in cash from any of the banks of the aforementioned consortium. The founding members of this consortium include institutions like the New York Community Bank (NYCB), NBH Bank, Firstbank, Sterling National Bank, and Synovus Bank. Figure Technologies, Inc. and Jam Fintop are founding members as well.
Targeting Defi, Payments, and Settlements
Stablecoins are a big part of what decentralized finance is about at this moment, and the USDF consortium is targeting this area with the development. Figure CEO Mike Cagney stated:
USDF opens up endless possibilities for the expanding world of deFi transactions.
Figure’s systems have already used USDF to settle securities transactions involving the New York Community Bank. Andrew Kaplan, NYCB’s chief digital and banking as a service officer, remarked about the importance of this launch for moving compliant