Five Banks In The United States Will Release Their Own Stablecoin
With the rise of cryptocurrencies like Bitcoin, there has been an increase in demand for digital currencies that provide stability. Stablecoins are digital currencies that maintain a fixed value concerning another asset like fiat currency or gold.
New York Community Bank, New York NBH Bank, FirstBank, Sterling National Bank, and Synovus Bank teamed up with Figure Technologies and JAM FINTOP to create a USDF stablecoin. Members of the consortium will be the only ones who can issue it. The price of a stablecoin is directly proportional to the value of the US dollar.
Non-bank stablecoins should be replaced by the USDF. Tether’s USDT and Circle’s USDC are currently the two biggest stablecoins in terms of market capitalization.
In the future, the consortium will attract more banking organizations to cooperate with it.
The US Dollar is not the only currency used in the United States, and there are many other currencies that different people and different companies use. In recent years, cryptocurrencies have become a popular option for those who want to invest in digital assets without being tied down to one particular financial institution or country.
The President of the United States’ working committee on financial markets urged stablecoins to be regulated quickly in November of last year. Members of the working group are worried about the possibility of inadequate stablecoin supply and reserve opacity. The US government intends to restrict the number of corporations that may issue their own stablecoins in this respect. According to the group, only insured depository institutions will be allowed to issue stablecoins.