A goal of USDF Consortium is to ensure a near impregnable digital market. They also want cheaper transactions and trustworthy traders – because there is an abundance of malefactors in today’s decentralized climate. As part of their plan to create a strong foundation in USDF to further innovative technology that can successfully tap into the power of the public blockchain, they have a number of banks coming together to trade in USDF. The banks in the amalgamation include NBH Bank, Synovus Bank, Sterling National Bank, New York Community Bank, and FirstBank. Other member companies who are part of the group but aren’t banks are JAAM FINTOP and Figure Technologies. With the aid of FDIC-backed banks, the Consortium believes they can only heighten in stature and relevance from here on out.
Stablecoin sent in USDF by banks under FDIC backing
The recently launched stablecoin known as USDF has taken a huge step in being accepted by banks. USDF is a stablecoin that has been Bank-Minted with a reference to Fiat Currency. The consortium created USDF and they are a group of banks supported by the FDIC (Federal Deposit Insurance Commission.) The stablecoin is aimed at creating a network of banks that enhance the rate at which token holders adopt USDF coins. This will encourage fluid transactions of decentralized currency on the public blockchain. A traditional financial system might not entice people as it once did due to this new breakthrough.
THE NEW STABLECOIN WAS TRANSFERRED TO NEW YORK COMMUNITY BANK CUSTOMER’S ACCOUNT FROM NBH BANK
New York Community Bank and NBH Bank recently informed that they enacted the maiden USDF transaction on the Blockchain known as Provenance. In the test, the USDF coin was moneyed by NBH Bank prior to being transferred to someone with an account in the New York Community Bank. This comes shortly after the consortium made public their creation and delve into the blockchain network. Ashley Harris, the consortium’s Chair, informed the media talking about the positive belief they have in this new partnership of multiple companies that offer financial services. Ashley detailed that the company expects the number of members to quickly escalate the more these banks show that USDF is a relevant coin and asset. It was also mentioned that USDF was a conformable element of banking and the blockchain.
Furthermore, when speaking to the panel earlier this month, Scott Lucas who is the marketing head at JP Morgan’s ledger tech, talked about the necessity for the exchange and use of information in a heterogeneous network within the banking department. He said that we needed to avoid isolation of the market’s financial services and instead, strive towards interconnecting several banking networks so we can perform transactions of digital assets in a seamless fashion. He said that he didn't recognize the current banking financial service as a market.
The public blockchain of Provenance was specifically made by the Provenance Blockchain Foundation for financial services to be done Figure Technologies, owned by Mike Cagney, utilize the permissionless blockchain to facilitate their marketplace. It is worth noting that despite the support of the FDIC, the USDF stablecoin is not yet approved as a pass-through insurance coin. This means there is no safeguard for token holders if the merger of banks called the USDF Consortium crumbles. They could lose values reaching $250,000 and it is also unsure how this would affect loans. Nevertheless, USDF can be seen on crypto trading platforms.
With this news, there will be some competition in the stablecoin market with coins like USDT and USDC already established on trading websites like https://redot.com/ and doing well. USDF is still somewhat different, though, and will remove friction in the financial system if the leaders of the USDF Consortium are to be believed. The Chief Operating Officer of Figure Technologies, Mike Cagney, spoke about the limitless potential of the decentralized financial system and how USDF transactions will be on-chain and easy. He also briefly touched on the expansion of the blockchain network with this ground-breaking stablecoin. Cagney continued with a good example of NYCB minting USDF and using it on Figure’s substitute trading systems to resolve security trade. The CEO sounded enlivened when talking about NYCB mining USDF constantly now and in the future.
The way it works is that USDF shall be minted by the banks in the USDF Consortium and then it can be redeemed for fiat currency as a 1:1 ratio from any of the banks in the consortium as well as transferred from one Consortium bank to another. Another important aspect of the Consortium is its regular compliance with the demands of decentralized stablecoin for financial services. The statement put out to the public basically said that USDF will handle the security concerns and regulations in the pubic blockchain and the coin was a safer option for token holders to operate with on the blockchain.
Stablecoins became a hot topic in the banking sphere so much so that U.S politicians and beyond don’t know how to effectively regulate it due to its decentralized nature. That being said, there is a growing contingent of politicians in the United States that are in favor of stablecoins and DeFi as a whole like Gary Gensler (SEC Chair), Janet Yellen (Senate Treasury Secretary), and Jerome Powell (Federal Reserve Chair).
This bold move is the first real step the traditional banking system has taken to form a bridge with the decentralized finance system. This amalgamation of banks is putting forth another choice of stablecoin to choose over the ones already in existence in the public blockchain network and it is easy to see why USDF could be appealing to token holders. It almost sounds like the best of both worlds with decentralized capacity but also backed by the banks and FDIC. Add to that the fact that the banks will mint the USDF stablecoin for you and you get to withdraw it 1:1 and we have a pretty good-looking deal. The future looks bright for stablecoins as it went past the market cap of $100 billion, with Tether’s USDT ruling over the market and accounting for nearly 50% of that number. USDF will start being minted in the coming weeks by the New York Community Bank.
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