U.S. Banks Form Consortium to Support Bank-Minted Stablecoin

Five FDIC-insured banks today announced the launch of the USDF Consortium, a group that was formed with the goal of building a network of banks to facilitate the adoption of USDF, a bank-minted stablecoin. The consortium’s founding members include New York Community Bank, Denver-based NBH Bank, Nashville-based First Bank, Montebello, New York-headquartered Sterling National Bank and Columbus, Georgia-based Synovus Bank, and the group said it intends to “significantly grow its membership of FDIC-insured banks through 2022 and beyond.” Figure Technologies and JAM Fintop are also founding members.

USDF will operate on the public Provenance Blockchain, will be minted exclusively by U.S. bank and will be redeemable on a one-to-one basis for cash from a consortium member bank.

The announcement follows a report issued by President Biden’s Working Group on Financial Markets last year, which recommended that stablecoins—which are typically backed by fiat currencies and carry the expectation that they can be redeemed upon request—only be issued by insured depository institutions.