A group of US banks are launching their own stablecoin USDF. Stablecoins will be issued by the USDF Alliance, which will allow its members (financial and banking institutions) to issue USDF. The proposed stablecoin would be the first of its kind to be minted by an FDIC-insured agency and complies with the recommendations of the Presidential Task Force on the use of stablecoins.
USDF Alliance Will Launch Stablecoin
The USDF Consortium, a membership-based banking group, is launching the first bank-minted stablecoin, also known as USDF.according to a Press release Published on Jan. 12, the goal behind this release is to remove friction by addressing “consumer protection and regulatory issues for non-bank-issued stablecoins and providing a safer option for blockchain transactions.”
The USDF consortium is the entity that empowers these banks to mint stablecoins that can be exchanged 1:1 for cash from any bank in the aforementioned consortium. Founding members of the alliance include New York Community Bank (NYCB), NBH Bank, Firstbank, Sterling National Bank and Synovus Bank, among others. Figure Technologies, Inc. and Jam Fintop are also founding members.
For Defi, Payment and Settlement
Stablecoins are an important part of decentralized finance at present, and the USDF consortium is developing for this field. Figure CEO Mike Cagney says:
USDF opens up endless possibilities for the ever-expanding world of deFi trading.
Figure’s system has used USDF settles securities transactions involving New York Community Bank. Andrew Kaplan, Chief Digital and Banking Services Officer at NYCB, commented on the importance of this launch for the transfer of compliant funds using modern blockchain services. The goal, the executive said, is to do things “in a way that is scalable, compliant with regulatory standards, and acceptable to all users, from large institutional investors to retail clients.”
Considering the recommendations of the Presidential Working Group on the use of stablecoins, this is the first attempt by multiple banks to propose alternative solutions for stablecoins that are already listed. Stablecoins have become one of the significant growth areas in the crypto industry, beyond $100 billion market cap. USDT, a token issued by Tether, which almost dominates half The market capitalization in this category.
According to Cagney, the New York Community Bank will mint stablecoins on demand in the coming weeks.
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