Amerant Bank, ConnectOne Bank and Primis Bank have joined the founding members of the USDF consortium, consisting of New York Community Bank, Synovus Bank, NBH Bank, First Bank and Webster Bank, which was formed to create a new stablecoin.
The USDF consortium
“The increase in membership is a testament to the Consortium’s ability to provide in-depth guidance and connect banks with turn-key technology solutions as well as the transformative role that blockchain payment rails can play in financial services”,
Ashley Hartis, president of the USDF Consortium, said in a note.
Formed last January, the USDF Consortium is an association of FDIC-insured banks.
“Our mission is to build a network of banks to further the adoption and interoperability of a bank-minted tokenized deposit (USDF™), which will facilitate the compliant transfer of value on the blockchain, removing friction in the financial system and unlocking the financial opportunities that blockchain and digital transactions can provide to a greater network of users”.
This is stated on the company’s website.
Mike Cagney, the CEO of Figure, the fintech behind the project explained the initiative as follows:
“USDF opens up endless possibilities for the expanding world of DeFi transactions. The ease and immediacy of using USDF for on-chain transactions was demonstrated this fall when NYCB minted USDF used to settle securities trades executed on Figure’s alternative trading systems”.
The consortium operates on the public blockchain, meaning it can be used for peer-to-peer (P2P) and business-to-business (B2B) money transfers.
An alternative to stablecoins
The clear objective of the initiative would be to facilitate financial transfers via blockchain on the basis of growing customer demand for this from traditional banks.
Usdf would be an alternative to traditional stablecoins, issued at a 1:1 exchange rate by one of the banks participating in the consortium. According to the consortium, this would ensure maximum privacy and security for customers. The consortium is confident that other banks will soon join the project.
Valerie Kramer, Chief Digital Officer of NBH Bank, said:
“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”.