What to know:

• LitFinancial launched its U.S. dollar stablecoin, litUSD, on the Ethereum blockchain to optimize funding and treasury management.
• The stablecoin is fully backed by cash reserves and aims to transform mortgage financing with blockchain technology.
• With anticipated payment volumes for stablecoins reaching $1 trillion by 2030, the recent U.S. regulations bolster the sector’s growth.

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Michigan-based LitFinancial recently revealed its U.S. dollar stablecoin, named litUSD, which operates on the Ethereum blockchain, as a part of the wider digital dollar initiative extending beyond traditional cryptocurrency users. The firm stated its goal is to utilize this token for reducing funding expenses while enhancing treasury management, as well as investigating the possibility of employing on-chain settlements for mortgage payments. Such alterations may allow for the public tracking of loan performance, fundamentally changing liquidity within the secondary mortgage market.

Stablecoins, which are digital currencies tied to fiat currencies like the U.S. dollar, are rapidly becoming popular alternatives for transactions, promising quicker and cheaper blockchain-based payments. A market forecast suggested that stablecoin payment volume could reach $1 trillion by 2030, catalyzed by the U.S. introducing regulations overseeing this asset class.

Tim Barry, CEO of LitFinancial, remarked, “Stablecoins are swiftly emerging as crucial tools for contemporary treasury operations. With litUSD, we are fortifying resilience and flexibility in our business model while leading the charge on how mortgage finance can advance with blockchain technology.”

LitUSD is positioned on Ethereum as an ERC-20 token and is pegged one-to-one with cash and cash equivalents securely held in reserves. The choice of Ethereum as a foundation stems from its stability and decentralized structure, aligning with national policies.

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