Versabank, a Canadian digital bank by focusing on commercial customers, has started testing a tokens that, according to the bank, provides a safer alternative and more in line with stablecoins.
The pilot, managed by the American subsidiary of the Bank, Versabank USA, will test an American version of the dollar for digital deposit revenues based on the Blockchain of the Bank (DDR) technology. Each token, of USDVB brand, represents an American dollar detained in Versabank USA.
The program will simulate thousands of small value transactions, first internally and then with external partners. The tokens will be managed via the digital platforms of the bank and the wallet and published on Ethereum Algorand and stellar Blockchains.
While stablecoins, cryptographic tokens with prices related to fiduciary currencies like the US dollar, have attracted most of the attention, banks also explore token deposits to make money transfers more effective using blockchain rails. A Stablecoin, like USDC from Circle or USDT from Tether, is generally issued by a private company and supports the value of the tokens with reserves held at a third -party goalkeeper. Meanwhile, a tokenized deposit is a responsibility of a regulated bank and subject to banking rules.
Earlier this year, US dollars’ dollar requests from the goalkeeper and the Vantage on Ethereum, while JPMorgan tested his layout token on the layer of layer 2 of Coinbase.
Unlike most stablescoins, Versabank said that its tokens are provided by the federal government and can gain interest, which makes them functionally similar to traditional deposits but with the additional efficiency of the blockchain regulation.
The bank said it expects to finish the pilot by the end of 2025 and would request approval from the office of the controller of the currency (OC) Above all public launch.
Read more: Stablecoins, Tokenization exerts pressure on money market funds: Bank of America
