On Monday, Jewel Bank, which is situated in Bermuda, announced that it would be creating a fully backed stablecoin to be known as Jewel USD (JUSD).
Users will be able to gain access to JUSD via the Polygon network.
Jewel stated in a press release that JUSD will keep a reserve ratio with a minimum of 1:1 with the U.S. dollar. This will ensure that the bank will always have funds in its deposits to maintain each JUSD that is in circulation.
The bank has indicated that it will also perform routine audits of its stablecoin reserves and will report on the results on a monthly and quarterly basis.
Due to the bank’s relationship with Polygon, JUSD transactions will be conducted on the blockchain, and the bank will use the Polygon ecosystem to develop stablecoin-based payment solutions for businesses and consumers.
In a statement, Jewel Bank’s founder and chairman, Chance Barnett, said:
“Our partnership with Polygon Companies helps power a key part of our long-term stablecoin infrastructure, which brings bank-grade safety, speed, and security to stablecoins.”
Jewel Bank Adopts Crypto
The Bermuda Monetary Authority granted Jewel Bank all of its necessary banking and digital asset business licenses in June, making it the first digital asset bank in the country.
Back in October last year, Nick Lepetsos, formerly of First Western Trust Bank, was hired as the COO of Jewel.
In light of the recent upheaval caused by the closure of the cryptocurrency exchange FTX, bank-issued stablecoins, which are often tied to a fiat currency, might be able to provide the market with some stability for individuals who are anxious about the speculative nature of cryptocurrencies.
The recent proof of reserves report for Crypto.com and the widely recognised crypto exchange platform Kraken have been revealed as audits of large exchanges to provide customers some assurance that their funds are completely backed 1:1 like Jewel in this case.