VersaBank announced the launch of a U.S. pilot program for tokenized U.S. dollar deposits branded USDVB. The initiative will simulate transactions on Algorand, Ethereum and Stellar blockchains through VersaBank’s U.S. subsidiary, aiming to demonstrate the viability of Digital Deposit Receipts (DDR) technology as a regulated alternative to private stablecoins.
The pilot will involve thousands of simulated transactions of small value, conducted first internally and then with select external partners. Tokens will be issued via a digital vault and managed through e-wallet platforms, with each USDVB token representing one U.S. dollar held on deposit at VersaBank USA. The bank emphasized that tokenized deposits remain liabilities of a federally insured institution and can earn interest, contrasting with typical stablecoins backed by third-party reserves.
Earlier experiments in tokenized deposits by other banks informed the program design. Custodia and Vantage Bank have previously tokenized dollar demand deposits on public chains, while a major U.S. bank tested a deposit token on an Ethereum layer-2 network. VersaBank’s pilot will expand on these efforts by offering multi-chain support and focusing on compliance, transaction transparency and operational security.
Fed fund stability and counterparty risk reduction drive bank interest in blockchain settlement rails. Automated token issuance and redemption processes will be subject to regulatory oversight, with the Office of the Comptroller of the Currency expected to review any proposed public launch. The pilot is slated for completion by the end of 2025, after which a formal approval request will be submitted. Success could pave the way for broader adoption of bank-issued, blockchain-native deposit instruments in corporate and institutional payment networks.
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