VersaBank launches US tokenised deposit pilot

The pilot involves US-dollar version of bank-issued tokenised deposits, called Digital Deposit Receipts (DDRs), which are encrypted 1:1 digital representations of actual cash deposits.

VersaBank says that these USDVBs, developed using its proprietary technology, provide better security, stability, and regulatory compliance than stablecoins. They are designed to combine the safety and soundness of traditional banking with the efficiency, cost savings, security, and programmability of blockchain technology.

Coming after a similar pilot in Canada, the latest trial is designed to demonstrate the functionality, security, operational integrity and compliance of the DDRs in the US ahead of a possible commercial launch.

David Taylor, president, VersaBank, says: “Our USDVB DDRs, developed in conjunction with law enforcement, represent the next step in the evolution of digital assets for both deposits and payments, and, importantly, a superior alternative to stablecoins based on their one-for-one representation of actual cash on deposit with our Bank, the legal ability to pay interest, and FDIC insurance.”

While VersaBank says it believes the USDVBs are the first operational, tokenised deposit issued by a nationally licensed bank in the US, JP Morgan recently outlined plans for its own deposit token where each one will serve as a digital representation of a commercial bank deposit.