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US banks launch their own stablecoin

US banks launch their own stablecoin

January 17, 2022

The USDF Consortium is a partnership of US banks that will launch its own stablecoin.

A stablecoin is a cryptocurrency that is linked to a fiat currency such as the dollar. The Tether is the main stablecoin, but due to a lack of transparency, other stablecoins are gaining in importance. After all, 1 USDT should always represent 1 real dollar, but observers regularly wonder whether the USDTs are fully backed by real dollars.

The banks see the popularity of cryptocurrencies and stablecoins and clearly want to take a part of this huge market. The USDF Consortium consists of a group of banks affiliated with the FDIC, the Federal Deposit Insurance Corporation. This agency insures customer accounts in the event of a bank failure. Some names include New York Community Bank, NBH Bank, Firstbank, and Sterling National Bank.

Redeemable in cash

USDF will be a stablecoin made by a bank and will always be exchangeable for cash at a participating bank on a 1:1 basis, addressing the concerns of consumers and regulators about the stablecoins that are not issued by banks ", says the USDF Consortium in a statement.

KYC

USDF will be issued on the Provenance Blockchain and the consortium hopes that multiple banks will implement the technology. The stablecoin follows the KYC and AML guidelines. A USDF transfer will therefore only be possible to a wallet whose owner is identified in the banking system. 


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