Four of the US banks have come together to launch a bank-minted alternative to non-bank-issued stablecoins. The USDF Consortium comprises founding bank members New York Community Bank, NBH Bank, FirstBank, Sterling National Bank, and Synovus Bank.
The USDF will be created exclusively by US banks and will be redeemable on a 1:1 basis for cash from a consortium member bank. It will facilitate peer-to-peer and business-to-business money transfers. Banks and their customers will also be able to use USDF for a wide range of applications, including capital call financing as well as invoice and supply chain finance.
Valerie Kramer, NBH Bank's Chief Digital Officer, says the Consortium expects to significantly grow its membership of FDIC-insured banks through 2022 and beyond.
She further added, “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.”
