“Banks create stablecoins themselves”… US deposit-based dollar token experiment

Digital asset companies and global exchanges are joining forces to enter the regulated dollar stablecoin market. This project is notable as traditional financial institutions are entering the blockchain ecosystem with a structure directly issued by US-authorized commercial banks.

According to the industry on the 23rd, Nasdaq-listed DeFi Technologies (DEFT) made a strategic joint venture and major equity investment in the stablecoin infrastructure company Firelabs on the 20th (local time). DeFi Technologies is a fintech company connecting traditional capital markets and decentralized finance (DeFi). While its headquarters are in Toronto, Canada, it operates digital asset exchange-traded products (ETPs) primarily in Europe. Through this partnership, the two companies plan to launch a regulated dollar stablecoin issued by a US-authorized commercial bank. The specific collaborative bank has not yet been disclosed.



This project also aligns with the Stablecoin GENIUS Act currently being discussed in the US Congress. The bill specifies that only institutions authorized by regulatory agencies can issue fiat currency-backed stablecoins.

The stablecoin developed by Firelabs is designed with an over-collateralization structure exceeding 105% of regulatory requirements. Additionally, an interest-bearing token will be launched, distributing profits based on bank capital. This differs from the approach of Tether, the world's largest stablecoin by market capitalization. Tether has been issuing USDT based on dollars received from investors and treating profits from managed collateral assets as company earnings. Based on this structure, Tether recorded a net profit of $13 billion last year. In contrast, Firelabs is designing a model that returns a portion of operational profits to investors.

Collaboration with global cryptocurrency exchange Kraken is also drawing attention. Firelabs plans to integrate with Kraken's infrastructure platform 'Kraken Embed' to enhance security and scalability. The aim is to enable institutional and corporate customers to more easily access regulated stablecoins.

Kraken's launch of 'xStocks' trading service on the 22nd, tokenizing 50 US stocks including Apple, Tesla, and NVIDIA, is also noteworthy. Based on the Solana blockchain, it allows 24-hour trading by issuing and circulating tokens backed by physical stocks. There are suggestions that the bank-issued stablecoin being developed by Firelabs could potentially serve as the base currency for such stock token trading. Previously, DeFi Technologies and Firelabs announced their plan to fully enter the Real World Asset (RWA) market with this collaboration. Amid ongoing discussions about won-based stablecoins in Korea, this experiment is expected to serve as a reference model in terms of product design and structure.

Reporter Do Ye-ri

yeri.do@sedaily.com