Falcon Finance and Anchorage Digital Bank have joined forces to launch a new USD-backed stablecoin dubbed the fUSD. In an official statement shared on Wednesday, the platforms claimed that this stablecoin is compliant with the GENIUS Act which could make it favourable for compliance-constrained institutional desks.
Anchorage Digital Bank will be serving as the official issuer of the fUSD stablecoin. Falcon Finance, meanwhile, will be driving the economics to fuel the stablecoin. Institutional digital asset platform Ceffu has been onboarded for its institutional custody and collateral infrastructure services.
Yield or no yield, that is the question
There has been a lot of noise in the U.S. around stablecoin holdings generating yields, a debate that fUSD’s design has addresses by legally decoupling its issuance from institutional rewards.
Since Anchorage Digital Bank is a federally chartered crypto bank, it will not pay any yield or rewards on the stablecoin itself. Here’s where Falcon Finance would step in.
“Rewards are offered by an entity separate from Anchorage Digital Bank, NA. and are tied to the stablecoin’s underlying collateral, such as U.S. Treasuries,” said announcement. “Falcon Finance operates an institutional rewards program, targeting roughly three percent per year. The rewards are available only to institutional entities that enter a contractual agreement with Falcon.”
As per Falcon, fUSD will be the first USD stablecoin that to offer this infrastructure to institutional holders in the U.S.
fUSD backing
Through fUSD, Falcon is expanding its reach to federally-regulated treasury desks.
Its announcement said that this regulatory safety leaves a massive financial void for market participants. With over $320 billion in stablecoins currently circulating and Treasury yields near four percent, holders are legally barred from receiving these returns. As a result, institutional desks miss out on more than $10 billion annually—income that instead flows directly to the token issuers.
Andrei Grachev, the Founding Partner of Falcon Finance, highlighted that the platform itself is deploying a portion of its own corporate reserves into fUSD on day one to back its launch. The exact details about the finances remain undisclosed.
Talking about the stablecoin, Grachev reiterated that fUSD’s issuance by a federally-chartered bank, backed by Treasuries, and launched on the infrastructure these desks already use to manage collateral qualifies the stablecoin for use by institutional holders.
“The desks we work with operate under compliance mandates that synthetic and offshore stablecoins were never designed to satisfy, and the regulated dollars they can hold today pay them nothing,” he stated.
Nathan McCauley, CEO and Co-Founder of Anchorage Digital also joined the conversation saying its federal bank charter should lace the token’s ecosystem with trust among investors.
“fUSD is built from the ground up for institutional use, and that’s only possible because of our federal bank charter,” said McCauley.
While this federal charter provides fUSD with the necessary armor against regulatory crackdowns, it also binds issuers to strict GENIUS and CLARITY yield restrictions.
The stablecoin market cap, as of Wednesday, stood at $317 billion as per CoinGecko.
Source: CoinGecko