For Hannah perez
The “USDF Consortium” announced its launch and seeks to offer a stablecoin pegged to the dollar that is backed by regulated US banks.
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A group of regulated banks in the United States has formed an association to coin and promote the adoption of their own stablecoin pegged to the US dollar, denominated USDForward (USDF).
The founding members of the consortium include banks New York Community Bank, FirstBank Y Sterling National Bank, among others. The partners are financial institutions regulated by the Federal Deposit Insurance Corporation (FDIC), one of the key regulatory bodies in the industry. Figure Technologies Y JAM FINTOP They are also founding members of the Consortium.
The USDF Consortium announced the partnership in a Press release published this Wednesday. The stable currency USDF will be minted exclusively by US banks members of the group and promises to be an alternative to stablecoins of the market that are not backed by banking institutions.
The USDF Consortium […] was launched today with the mission of building a network of banks to promote the adoption and interoperability of a stablecoin minted by banks, which will facilitate the transfer of compatible value on the blockchain, eliminating friction in the financial system and unlocking [nuevas] financial opportunities [para los] users.
USDF: stablecoin minted by US banks
According to the statement, the stablecoin will operate on the public blockchain. Provenance Y It can be exchanged in a 1: 1 portion for cash at member banks of the Consortium. More FDIC-insured banks are expected to join the association in the coming months.
The director of digital banking and banking as a service of the NYCB, Andrew Kaplan, highlighted in this regard that, being a stablecoin created and managed by regulated banks, “USDF will enable wide use of a real-time on-chain payment system that meets important principles of security and robustness, compliance with anti-money laundering standards, and financial stability.“.
USDF addresses consumer protection and regulatory concerns for stablecoins issued by non-banks and offers a more secure option for transacting on the Blockchain.
Members of the association hope that the initiative will also enable banks of all sizes in the United States to provide digital banking solutions to their customers. “The Consortium was formed to meet the needs of clients demanding greater access to blockchain applications for payments and other transactions.“The statement reads.
For its part, the CEO of Figure, Mike Cagney stressed that “USDF opens up endless possibilities for the expanding world of trading in [finanzas descentralizadas]”(DeFi).
A “regulated” alternative to USDT and USDC
USDF hopes to become a banking alternative for Tether (USDT) and USDCoin (USDC), from Circle, the two biggest stablecoins From the market. Both have a capitalization of more than USD $ 120 billion, with USDT being the largest of the two in terms of capitalization and market volume.
The digital currency project had initially been unveiled in November. At that moment, Bloomberg reported that members of the consortium were in Talks with Major US Regulators, including Federal Reserve officials (FED), on the possibility of issuing a stablecoin that satisfied the control bodies.
The news came shortly after the Presidential Task Force on Financial Markets present a proposal to regulate companies that issue stablecoins linked to fiat currencies.
Stablecoins play a key role in the cryptocurrency market. In addition to providing investors with entry and exit bridges, they are stable investment options and are widely used on DeFi platforms. However, in recent times, regulators have raised concerns about these assets due to the nature of the reserves that back them.
In case of Tether It has been especially controversial given the allegations due to a lack of transparency with which the company has handled information on its dollar reserves for the currency.
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Sources: PRNewsWire, CoinDesk, Bloomberg
Article by Hannah Estefanía Pérez / Daily bitcoin
Image from Unsplash
