A group of US banks has plansto launch a large stablecoin together. This is supposed to be the name USDF receive. The aim of this initiative is, among other things, to dispel the doubts that are harbored about other stablecoins with regard to reserves with your own stablecoin. Founding members of the USDF consortium include Synovus (48th largest bank in the US by assets according to MX Technologies), the New York Community Bank (No. 45), the FirstBank (No. 88) and the Sterling National Bank (No. 77). They are covered by the Federal Deposit Insurance Corp. (FDIC), one of the most important regulators in the industry.
The consortium would also like to encourage other financial institutions to join.
USDF are minted exclusively by US banks and can be exchanged at a 1: 1 ratio for cash from a member bank of the consortium. Addressing consumer and regulatory concerns with non-bank stablecoins, USDF offers a more secure option for transactions on the blockchain
, it says in the message.
USDF runs on public provenance blockchain
The banks will operate the stablecoin USDF on the public provenance blockchain. The availability of USDF on a public blockchain brings some benefits. For this reason, banks and their customers can use the stablecoin for a wide range of other applications in addition to peer-to-peer and business-to-business money transfers. These scenarios include, for example, capital calls or billing and supply chain financing.
However, the communication leaves out whether the reserves for the USDF are also covered by the FDIC. In the case of Tether in particular, there were several concerns about the opaque nature of the stablecoins’ cover.
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