Three banks have joined a consortium of financial institutions planning to offer a new Stablecoin.
Amerant Bank, ConnectOne Bank, and Primis Bank have joined the USDF consortium of founding members New York Community Bank, Synovus Bank, NBH Bank, First Bank, and Webster Bank, the group said in a statement Wednesday. Investment bank Piper Sandler will guide the process as the consortium develops.
The USDF consortium was formed in January to address concerns about fiat-pegged cryptocurrencies issued by non-banking entities. In the $1.8 trillion crypto economy, Stablecoins has ballooned to around $180 billion, with Tether’s USDT at the top of the list.
"The increase in membership is a testament to the consortium's ability to provide in-depth guidance and connect banks with turnkey technology solutions and the transformative role that the blockchain payments rail can play in financial services," Ashley Harris, chairman of the USDF consortium, said in a statement. USDF tokens are exclusively minted by Bank of America and represent deposits of USDF consortium banks. So far, USDF has only been minted based on test cases.
A joint launch of a Stablecoin by banks insured by the Federal Deposit Insurance Corporation (FDIC) appears to address lingering concerns about the robust backing of major Stablecoins. However, details including whether the FDIC can ensure Stablecoin-related deposits remain to be fleshed out.
An FDIC spokesperson claimed in January that it was too early to determine whether the FDIC could insure Stablecoins.
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