FDIC-Backed Banks Send Stablecoins in USDF First

NBH Bank and New York Community Bank have conducted the first USDF transaction over the Provenance Blockchain. NBH Bank minted the newly introduced stablecoin and sent it to a customer of New York Community Bank as part of a test run.

USDF is a stablecoin offered by the USDF Consortium, a group of FDIC-backed banks that announced its formation last week. “We expect our membership to increase rapidly through 2022 as member banks demonstrate that USDF is a valuable, compliant component of their digital asset strategy," said USDF Consortium Chair Ashley Harris in a press statement.

Read more: US Banks Form Group to Offer USDF Stablecoin

In a panel hosted by the Global Blockchain Business Council on Wednesday, Scott Lucas, JPMorgan’s head of markets distributed ledger technology, highlighted the need for interoperability among banks.

“The interconnectivity between networks to be able to trade asset for asset across networks is where the success would be, otherwise we have an interesting set of isolated use cases that isn’t a market,” he said.

Provenance is a permissionless, public blockchain designed by the Provenance Blockchain Foundation for the financial services industry. It is also used by Figure, serial entrepreneur Mike Cagney’s financial services company, which runs marketplaces on Provenance.

Read more: FDIC Still Unclear if USDF Stablecoin Is FDIC-Insurable

While the banks in the USDF Consortium are FDIC-backed, it has not been confirmed if the stablecoin itself would qualify for the so-called pass-through insurance, which would protect token holders against losses of up to $250,000 if the bank should fail.