Fluent Finance, a blockchain-based fintech company, has announced its latest partnership with Moonstone Bank. Moonstone will be a custody partner in Fluent’s growing network of banks, with plans to expand into a full-node member soon. This partnership will allow Fluent and Moonstone Bank to connect the traditional financial system to the emerging Web 3 economy.
Established in 1887, Moonstone Bank (DBA of Farmington State Bank) is a state-chartered digital bank that provides financial services to innovative businesses and small to medium enterprises under the direction of the current CEO, Ronald Oliviera. Oliveria brings over 25 years of experience in financial services, fintech, and start-ups to Moonstone and previously served as the CEO of Revolut USA and on the board of directors for California’s Banking Association.
Fluent Finance, led by current CEO Bradley Allgood, set out to bring the benefits of decentralized finance to the traditional banking sector. Allgood’s approach was to create US+, a federated, high-trust U.S. dollar stablecoin with fully auditable one-to-one reserves and on-chain transparency. In order to further strengthen the reliability of US+, the Fluent decentralized autonomous organization (FluentDAO) was established to distribute decision-making power among banking partners and to prohibit any given member from having non-competitive influence over US+.
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“Moonstone Bank is now a key player in Fluent’s financial ecosystem and will serve as an initial custodian partner. Fluent plans to eventually bring Moonstone Bank on as a full-node partner, which will allow the bank to mint and burn US+,” said Allgood.
“Collaborating with Moonstone is incredibly exciting and will help Fluent bring a safe and secure stablecoin to market while allowing for instant payments along with lower fees. It will also clearly demonstrate the benefits that stablecoins can bring to the banking sector, businesses, and everyday end users alike.”
The concept of a stablecoin is simple. An individual can purchase a coin that is pegged to a fiat currency either algorithmically or through reserves held by the coin’s issuer. When a person converts a U.S. dollar stablecoin back into fiat currency, it should always be worth one U.S. dollar. However, in recent months many stablecoins have faced a variety of challenges.
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Fluent’s solution is to progressively build an organization of financial institutions that issue stablecoins, known as the Fluent Federation of Member Banks. For each US+ stablecoin a Federation Member mints, there is a U.S. dollar held in a reserve account. When the stablecoin is converted back to fiat currency, the US+ is burned. This ensures there is always a one-to-one ratio between dollars held in reserve and US+ issued by the Federation.
Allgood elaborates on the pressing need for a secure stablecoin: “Stablecoins offer incredible benefits for banks and consumers. To design a stablecoin as we have at Fluent, you have to anticipate regulation, be forward-looking, and make sure that there is an actual dollar behind each coin. To reduce the risk and have the trust necessary for a stablecoin to be used broadly in the market, on-chain transparency and audibility are a must. Being opaque with what’s backing a stablecoin just isn’t secure for users.”
Fluent’s collaboration with Moonstone Bank and the collective experience of the two companies in banking and finance bring fresh promise to stablecoins and the maturation of crypto-currencies with responsible governance.
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