Jewel Bank, Polygon to launch Bermuda’s first USD-backed stablecoin

Institutions in Bermuda will soon be able to trade real-time settlements using a stablecoin with a 1:1 ratio to the US dollar, Jewel Bank founder and chairman Chance Barnett told Cointelegraph.

Called Jewel USD (JUSD), the first stablecoin released in the territory is powered by the Polygon blockchain, which enables transactions between wallets available to institutional clients. In the future, the bank plans to use the Polygon ecosystem for commercial and retail stablecoin-based payment solutions, including transactions between institutions, businesses and payments between individuals.

“The need for a USD real-time settlement network outside the US is significant for both fintechs and digital asset firms, so we are filling a big gap in the market. The US has solutions like Signature Signet for real-time settlement, and now Jewel Bank is providing a Bermuda-based non-US solution for the industry , and the response from customers by signing up before launch has been significant.” noted Barnett.

There are currently 25 stablecoins traded on the Polygon blockchain, including a synthetic euro token, a yen-pegged Japanese stablecoin and a South African stablecoin pegged 1:1 to the South African rand (ZAR).

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Although an official launch date has not been set, the bank said it should happen in the next few months. According to Jewel, the stablecoin operations and its reserves will be subject to bank-level audits and regulatory oversight, with updates on a monthly and quarterly basis.

“The stablecoin is directly issued by the bank, not a less regulated entity that does not directly hold USD fiat deposits/reserves as a bank can. This reduces the risk for stablecoin owners.”, the manager commented on the risk management measures taken. to issue stablecoin. Barnett also stated:

“JUSD transactions will only be possible between permitted clients/wallets, eliminating the possibility for bad actors to use these assets for any unauthorized activity. Jewel may attempt to open its stablecoin to non-clients in the future.”

Bermuda has worked to retain its relevance as a financial jurisdiction by supporting the digital asset business. In 2020, the territory announced a partnership with stablecoin platform Stablehouse to roll out a pilot program for a digital “stimulus” token, aimed at both residents and merchants on the islands.

“With a plan to develop into an international hub for digital assets, in 2018 Bermuda created regulatory clarity and a legal framework for both digital assets and banking […] Meanwhile, the United States and other leading economies and their regulatory bodies have yet to provide similar clarity and comprehensive frameworks for digital assets and digital asset businesses,” Jewel’s executive argued.

The Bermuda Monetary Authority (BMA) granted 14 licenses for crypto firms to operate in the British island territory from June 2022, with four of them issued in 2022, Cointelegraph reported.