Fiserv announced last year that it was developing a stablecoin called FIUSD as it was creating a digital asset platform, but then the company went mum on the coin’s roll-out.
Now, it appears FIUSD will start circulating next month, according to comments that CEO Mike Lyons made at an investor conference last week. The stablecoin’s name stands for financial institution U.S. dollar.
“FIUSD goes live in July,” Lyons said on Thursday at the Bernstein Strategic Decisions conference.
The payment processor and bank technology company is eager to respond to its financial institution clients’ demands for stablecoin services, the CEO said. Fiserv developed the platform to give banks and credit unions a means of using digital assets in a federally compliant way, and keeping stablecoin deposits from leaving their accounts.
Payments players, financial institutions and merchants became more interested in stablecoins last year after President Donald Trump enacted the Genius Act, initiating a regulatory framework for stablecoins. New regulations stemming from the law are being drafted now per federal agencies.
A stablecoin is considered more stable than other cryptocurrencies because it’s backed by a stable asset, such as the U.S. dollar. The Genius Act calls for stablecoins to be backed by U.S. dollars on a 1:1 basis, though some of those dollars may be in U.S. dollar denominated reserves, like U.S. Treasury bills.
Fiserv contends its FIUSD will spread stablecoin holdings to smaller financial institutions. Tether’s USDT, Circle Internet Group’s USDC and PayPal Holdings’ PYUSD are currently the most widely circulated stablecoins, but Fiserv sees them as piling up reserve holdings at large banks.
“Most of these models concentrate collateral at one or two large global banks, which is effective for reserve integrity, but does not strengthen the broader, global banking infrastructure or improve outcomes for community banks and credit unions,” Fiserv argued in a February video explaining its stablecoin strategy.
While Fiserv suggested last June that its stablecoin might be active by the end of the year, that doesn’t seem to have happened yet, at least not on a broad basis. There isn’t any evidence of it circulating now. A spokesperson for the company didn’t immediately respond to a request for comment Wednesday.
The company buttressed its abilities to service digital assets when it purchased StoneCastle Cash Management last year because that business includes a stablecoin and cryptocurrency custody license. As a result, Fiserv can now act as a custodian of those services, but it only completed the acquisition as of late December.
Lyons explained why such stablecoin services are important to Fiserv banking clients during his discussion with a moderator at the Bernstein conference.
“Our banking customers' biggest worries around stablecoin [are] that deposits leave the system,” he said, referring to the banks’ ecosystems. “We created FIUSD stablecoin so the banks can meet the regulations of the Genius Act, and offer their customers both a stablecoin wallet and a fiat wallet in the single [Demand Deposit Account].”
While Milwaukee-based Fiserv is counting on stablecoin for future growth, those operations are not expected to be a big contributor to revenue anytime soon. The company pointed to stablecoins, and other emerging efforts underway, as contributing less than 1% to growth during an investor day presentation last month.
Lyons called out the strengths of stablecoins Thursday, while acknowledging their nascent place in the market. “It's low friction, it's borderless, you’ve got great record keeping underneath it, it's 24/7, it's instant account to account, so, we think there's a lot of attractiveness to the product,” he said. Nonetheless, “there isn't massive demand for it today.”
While Fiserv appears poised to pitch stablecoin services to community banks and credit unions in particular, its stablecoin services may have appeal for the company’s merchants clients too.
“Merchants want to reduce acceptance costs, and if stablecoin can do that, they'd be interested in it,” Lyons said. Merchants will also likely be drawn to stablecoins, if their customers are, he said, adding that he expects them to initially show up in e-commerce.
The first use case Fiserv is pursuing is in North Dakota, where the company said last year that it would white label its FIUSD stablecoin to the Bank of North Dakota, the only state-owned bank in the U.S. Then, that bank will issue the stablecoin under its unique Roughrider moniker.
Roughrider has been expected to be available to banks and credit unions in the state this year, allowing for bank-to-bank transfers, international money movement and merchant adoption. At the moment, it’s still trotting down that path.
That stablecoin is set to be introduced to the state’s local banks in September as plans for a pilot project with a handful of financial institutions takes shape, according to a March report from the news outlet North Dakota Monitor.
“There are cross-border pilots and bank-to-bank, account-to-account pilots going on, and whatever demand surfaces, we think that stablecoin has got a lasting place in the world,” Lyons said.
Still, Fiserv disclosed this risk factor in its annual filing with the Securities and Exchange Commission in February: “We have made certain assumptions about future stablecoin regulation, but there is no certainty about the favorability of the final regulatory environment.”
The company followed with “given the relative recency of the GENIUS Act, it is not clear what the market demand will be for our stablecoin offering from our financial institution customers.”
