Polygon Unveils Bermuda’s First USD-Backed Stablecoin 

Polygon Unveils Bermuda’s First USD-Backed Stablecoin 

Bermuda-based Jewel Bank is working with Ethereum scaling solution Polygon (MATIC) to release a stablecoin backed 1:1 with the U.S dollar. At launch, JUSD will be used exclusively for payments between the bank’s institutional clients. 

Jewel Bank, a Bermuda-based digital bank, has partnered with Polygon (MATIC) to launch a U.S dollar-backed stablecoin that will enable cross-border transactions between wallets maintained by its institutional clients. The bank has plans to use the blockchain ecosystem powered by Polygon to introduce a stablecoin payment solution for commercial and retail transactions, including for those between institutions, businesses and individuals within the British island territory.

The bank which became the first financial institution to be licensed by the Bermuda Monetary Authority to provide services in cryptocurrencies, is also the first to offer a fully USD reserve backed and bank-issued crypto token on the Polygon network. According to a statement released by Chance Barnett, co-founder and chairman of Jewel Bank, ‘JUSD’ or Jewel USD is directly issued by the neo-bank and “not a lesser regulated entity that doesn’t directly hold USD fiat deposits/reserves the way a bank can”. In order to eliminate the possibility of bad actors using the assets for “unsanctioned activity”, Jewel will only allow JUSD transactions between permissioned client wallets for the time being. 

Although Jewel Bank has not announced an official launch date for the token, it is expected to go live in the coming months. The digital bank has stated that its dollar backed stablecoin and its operations will be subject to the financial regulator’s oversight and bank-level audits. With a minimum reserve ratio of 1:1 with the dollar, Jewel will regularly update its JUSD protocol on a monthly and quarterly basis..

Polygon Unveils Bermuda’s First USD-Backed Stablecoin 

In 2018, the island nation passed a draft for the Digital Assets Business Act (DABA), which became one of the first legal frameworks for crypto service providers to operate under in the world. Since 2020, 14 digital asset companies including big names in the industry such as Circle, Stablehouse, Bitrex Global, XBTO and Apex Group have been granted licences to operate in the island nation by the monetary authority. 

As a member of the Financial Action Task Force (FATF) – an international body that sets global standards to prevent money laundering and terrorist financing across the world, Bermuda enforces all globally-recognized anti-money laundering (AML) and anti-terrorist financing laws. In 2020, the island nation collaborated with Stablehouse to conduct a pilot programme for a digital “stimulus” token that enabled retail payments for merchants and residents. 

“With a plan to develop into an international centre for digital assets business, in 2018, Bermuda created regulatory clarity and a legal framework for both digital assets and banking. Meanwhile, the U.S and other leading economies and their regulatory bodies have yet to provide similar clarity and holistic frameworks for digital assets and digital asset businesses,” said Barnett in an interview given to Cointelegraph. 

25 stablecoins are currently deployed on Polygon – an Ethereum-based scaling solution, including a euro token, a Japanese yen-backed stablecoin and a South African stablecoin that is backed 1:1 with local currency rand. 

At the time of writing, MATIC is trading at $0.80 – down 2% in the last 24 hours. With 8.9 billion tokens in supply, Polygon has a total market valuation of $7.17 billion. The protocol is one of the fastest growing blockchain ecosystems in the industry.

Also Read BIS Introduces a Global Standard for Banks with Exposure to Crypto Assets

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