FDIC-insured financial institutions launched the USDF ConsortiumTM today as a network of banks dedicated to building the adoption and interoperability of a compliant stablecoin (USDF), which will create a more efficient financial system and unleash the financial opportunities that blockchain and digital transactions can provide.
Members of the Consortium include New York Community Bank (NYCB), NBH Bank, FirstBank, Sterling National Bank, and Synovus Bank. USDF will be facilitated and promoted by Figure Technologies, Inc. and JAM FINTOP. In 2022 and beyond, the Consortium aims to significantly grow its membership of FDIC-insured banks.
In contrast to non-bank-issued stablecoins, USDF is a bank-minted alternative. A USDF will be minted by U.S. banks and will be redeemable for cash from Consortium member banks on a 1:1 basis. Stablecoins issued by non-bank issuers are subject to consumer protection rules and regulations. The USDF offers a more secure way to transact over the blockchain.
USDF uses the public Provenance Blockchain. USDF’s availability on the public blockchain allows banks and their customers to use USDF for a variety of applications, such as invoice and supply chain finance, along with peer-to-peer and business-to-business money transfers.
The USDF Consortium will allow banks of all sizes, and importantly, community banks, to provide the digital banking solutions that more and more of our clients expect, This aligns with our focus on building out a comprehensive digital financial ecosystem to provide greater access to credit, FDIC-insured depository and treasury management solutions, and integrated financial information, all while lowering transaction costs for small and medium-sized businesses.Valerie Kramer, Chief Digital Officer – NBH Bank
This will solve a critical need to move funds on blockchain, and it does so in a way that can scale, adheres to regulatory standards, and is acceptable to all users from large institutional investors to retail customers, As a form of digital currency created and administered by regulated U.S. banks within the USDF Consortium, USDF will enable wide use of an on-chain, real time payments system that satisfies important principles of safety and soundness, compliance with anti-money laundering standards, and financial stability.Andrew Kaplan, Chief Digital and Banking Service Officer – NYCB
Our membership in the Consortium will enable us to integrate real-time payments into our operating model, allowing us to leverage the benefits of blockchain technology to streamline multi-party decisioning processes and provide certainty of settlement. We are exploring specific segment-focused use cases that are relevant to our commercial model, including potential applications to commercial lending and loan syndications.Bea Ordonez, Chief Financial Officer – Sterling National Bank
Using the breakthrough technology of blockchain, the USDF Consortium is enabling banks to leverage responsible innovation and growth. Each founding member bank of the Consortium and Figure has a representative on the Consortium’s Board of Directors, which will oversee governance, activities, membership, and other aspects of the Consortium.