VersaBank Launches Tokenized Deposit Pilot Program in U.S.

VersaBank, a Canada-based chartered bank, has announced the launch of its tokenized deposit pilot program in the US. The program aims to provide commercial lending and banking services, as well as cybersecurity services. The bank operates through two segments: Digital Banking and DRTC (cybersecurity services). The Digital Banking segment offers electronic deposit and lending solutions, while the DRTC segment develops solutions to address cyber threats for financial institutions, corporations, and government entities.

VersaBank, a Canada-based chartered bank, has announced the launch of its tokenized deposit pilot program in the United States. The program, known as the USDVB Pilot Program, aims to demonstrate the functionality, security, and operational integrity of the bank's proprietary Digital Deposit Receipts (DDRs) in a US dollar environment. This initiative is a critical milestone in VersaBank USA's preparations to commercialize its USDVBs in the United States.

Developed exclusively by VersaBank using its proprietary technology, DDRs are bank-issued tokenized deposits that function as 1:1 digital representations of actual cash deposits. They offer significant advantages over traditional stablecoins, including superior security, stability, and regulatory compliance. DDRs combine the safety and soundness of traditional banking with the efficiency, cost savings, security, and programmability of blockchain technology [1].

The USDVB Pilot Program will involve thousands of transactions of de minimis value, with controlled internal testing initially. This will be followed by limited external deployment with designated deposit partners and their clients. The pilot program is expected to be completed by the end of 2025, with commercial launch planned as soon as possible thereafter. VersaBank USA will seek the Office of the Comptroller of the Currency's (OCC's) "non-objection" prior to launching commercially [1].

VersaBank's Digital Deposit Receipts (DDRs) are designed to address the growing propensity of consumers and businesses to hold assets in e-wallets and engage in digital financial transactions. The bank's proprietary technology ensures that USDVBs are issued and managed securely through the VersaVault digital vault platform on the Algorand, Ethereum, and Stellar blockchains. Access and control of USDVBs will be managed through the VersaView e-wallet platform [1].

The launch of the USDVB Pilot Program is part of VersaBank's broader strategy to provide commercial lending and banking services, as well as cybersecurity solutions. The bank operates through two segments: Digital Banking and DRTC (cybersecurity services). The Digital Banking segment offers electronic deposit and lending solutions, while the DRTC segment develops solutions to address cyber threats for financial institutions, corporations, and government entities [1].

VersaBank's Common Shares trade on the Toronto Stock Exchange and NASDAQ under the symbol VBNK. The bank's digital banking solutions are designed to profitably address underserved segments of the banking industry in a significantly risk-mitigated manner. With the USDVB Pilot Program, VersaBank aims to generate very low-cost deposits to fund its US growth and offer an ideal, market-ready solution for US banks, payment providers, and other financial businesses to enter the digital commerce evolution [1].

References:
[1] https://www.prnewswire.com/news-releases/versabank-announces-versabank-usa-launch-of-tokenized-deposit-pilot-program-in-united-states-302538837.html