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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.

The Fed Board of Governors released its final order on Wyoming-based Custodia Bank's application to become a member of the Federal Reserve system, expressing strong doubts about Custodia's management team, financial condition and business model in rejecting the application. Custodia responded with a framing of the context for the Fed's implicit new policy stance and and what other banks might learn from them. The Fed outlined at least five new policies in the Custodia order, including the casting doubt on whether any issuer of a stablecoin on an open, public and/or decentralized network can comply with anti-money laundering/combating financing of terror laws. Also, the Fed de facto established a new requirement that state banks be FDIC-insured in order to become Fed member banks because, in its words, FDIC insurance is "a critical tool in preventing bank runs."

Avanti Bank and Trust was formed to apply for a charter under Wyoming's new special purpose depository institution law. The law requires banks to be 100% reserved, because they are not allowed to lend. They are not FDIC insured, but they will be the first banks in the United States that will be permitted to custody crypto assets.

Binance U.S. holds its customer's USD deposits in "pooled custodial accounts" maintained in a manner that provides access to pass-through FDIC insurance coverage up to the depositor coverage limit, which is currently $250,000.

According to a poll released on May 4, 2023 by Gallup, 48% of U.S. adults are concerned with their money, broken down into 19% who are "very" worried and 29% who are "moderately" worried, despite the fact that the Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per borrower, per bank. On the other hand, 30% selected "not too worried" and 20% are "not worried at all." The poll was conducted between April 3 and April 25 following the collapse of Silicon Valley Bank in March. Americans with no college degree tended to be more worried at 54% while only 36% of college graduates expressed concern.

"On Friday, I resigned as the first chief innovation officer at the Federal Deposit Insurance Corporation. The position was created in 2018 to kickstart a technological transformation of America's financial system, focusing on modernization and confronting threats from criminals, terrorists and especially Russia and China. Serving in this role was an honor, but my decision to leave was right. The federal bureaucracy is both hesitant and hostile to technological change. America's global financial leadership is in jeopardy."

"Fiduciary accounts are deposit accounts owned by one party but held in a fiduciary capacity by another party. Fiduciary relationships may include, but are not limited to, an agent, nominee, guardian, executor or custodian. "

The Federal Deposit Insurance Corporation gave the green light to an application from the FinTech firm Square to create a de novo industrial bank in Utah. Square Financial Services will originate commercial loans to the retailers that use Square for payments. The Utah Department of Financial Institutions still has to issues approvals to the San Francisco-based FinTech.

U.S. Stablecoin reserves may not be fully protected by FDIC insurance. And if they aren't, then stablecoins may actually be less secure than ordinary bank deposit accounts. If people really are investing in stablecoins because they think they are safer than bank deposit accounts, I'm afraid they have allowed the smoke to get in their eyes and the mirrors to blind them.

The new MoCaFi Mobility Bank Account comes with the MoCaFi Mobility Debit Mastercard® which provides access no charge ATM withdrawals and options on how to load your funds. The MoCaFi Debit Card can be used at any of the 55,000 AllPoint Network ATMs to withdraw cash with no surcharge fee. The MoCaFi Debit Card is issued by Sunrise Banks N.A., Member FDIC, pursuant to a license from Mastercard International Incorporated. The card may be used everywhere Debit Mastercard is accepted. A MoCaFi Bank Account can be opened in minutes with the MoCaFi app, available in the Apple App Store or Google Play Store. When a MoCaFi account is opened, the customer immediately receives their account number and routing number for direct depositing approved payroll and government benefits checks.

Each user's funds will be covered by the Federal Deposit Insurance Corporation up to $1.25 million. To get around the $250,000 FDIC limit per bank, Robinhood is partnering with six banks that it will spread a user's cash across as necessary to bundle up to that sum.

Equilibrium's EOSDT is now backed by smart contracts that pay out consumers if the dollar-pegged token crashes through its collateralized floor. Much like how America's FDIC insures consumers' traditional bank deposits against a run.

"CarbonUSD, or CUSD for short, is a compliant fiat-backed stablecoin where users can deposit and withdrawal real USD. To mint new CUSD tokens, users can make fiat deposits via ACH or Wire Transfer with our financial partner, Nevada-based Prime Trust. Frequent third-party attestations by leading auditor Cohen & Co. verify publicly that each token is backed 1-to-1 by escrowed funds in FDIC-insured accounts with Prime Trust's banking partners."

"The SPDI is not a typical bank charter, but does allow an institution to receive deposits and conduct a range of other traditional banking activities, including fiduciary asset management, custody and related activities. As stated on the Wyoming Division of Banking's website, it is expected that most SPDIs will focus on digital assets and virtual currencies, but SPDIs may focus on traditional assets as well. Unlike traditional banks, SPDIs are prohibited from making loans with customer deposits and therefore are not required to obtain FDIC insurance-although they are permitted to do so."

"The US Securities and Exchange Commission (SEC) issued a "Wells notice" warning that it will sue Coinbase if it moves forward with a plan to offer a new product called Lend that would pay stablecoin owners 4% interest on their savings. Coinbase touted the product as a way for crypto owners to earn far high interest than what is offered at regular banks, and promised to offer a "peace of mind" guarantee as a substitute for the FDIC insurance that comes with traditional interest-bearing accounts."

Members of the USDF Consortium met with senior officials of the Federal Reserve, Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. about how to issue a regulatory-compliant stablecoin. The group's approach is purportedly consistent with the recommendations of the President's Working Group that stablecoin be issued only by insured depository institutions. The Consortium's USDForward (USDF) stablecoin would be issued, and backed, by dollar deposits at U.S. banks. The USDF Consortium is an association formed by Figure Technologies, JAM FINTOP, and a group of FDIC-insured banks. USDF is currently being used on the Provenance Blockchain in a limited scope to facilitate the real-time, bilateral settlement of transactions.

The USDF Consortium, an association of FDIC-insured financial institutions, launched, with a mission to build a network of banks to further the adoption and interoperability of a bank-minted USDF stablecoin. USDF will be minted exclusively by U.S. banks and will be redeemable on a 1:1 basis for cash from a Consortium member bank. The Consortium's founding bank members include New York Community Bank, NBH Bank, FirstBank, Sterling National Bank, and Synovus Bank.

FDIC insurance only protects customers in the event of the insolvency of the bank holding the deposits. That leaves open the question of where stablecoin holders rank in the event of the stablecoin issuer's insolvency. This was recently discussed in a Twitter thread launched by JP Koning to which George Selgin and Dan Awry contributed. According to my read of the thread, which focused specifically on the Circle-issued USDC stablecoin, the answer seems to be "maybe" but the question could be tied up in courts for a long time.

"Silvergate Bank, the US dollar banker to the crypto world, is having issues. The latest red flag: Silvergate is unable to file its 10-K annual report for 2022 on time, and it won't even be able to meet an extended March 16 deadline. In a late filing notice to the SEC, the California bank said it was not sure it could survive as a "going concern." Silvergate is toast. We suspect the FDIC will be swooping in sooner rather than later to sell the bank or liquidate its assets."

"This chart shows the elevated level of unrealized losses on investment securities due to high market interest rates. Unrealized losses on available-for-sale and held-to-maturity securities totaled $620 billion in the fourth quarter, down $69.5 billion from the prior quarter, due in part to lower mortgage rates. The combination of a high level of longer-term asset maturities and a moderate decline in total deposits underscores the risk that these unrealized losses could become actual losses should banks need to sell securities to meet liquidity needs."