MakerDAO, a smart contract protocol built on the Ethereum network, announced on Tuesday that it is lending out 100 million DAI to the United States-based commercial bank, Huntingdon Valley Bank.
The latest deal is aimed at bolstering the growth of “Huntingdon Valley Bank’s existing and new businesses.”
MakerDAO’s Collaboration With Huntingdon Valley Bank
In March, MakerDAO declared that it has received a Collateral Onboarding Application from Huntingdon Valley (HV) Bank, where the application is designed to increase the demand for the project’s stablecoin DAI.
The application contained a request for $100 million from MakerDAO. It also outlined a legal structure where the bank enters a Master Purchase Agreement with a Trust that will operate as a representative for MakerDAO, where both entities gain equally from interest on loans paid to the bank.
With the deal being approved by the stablecoin issuer, it has given the loan to HV bank, where the bank has given its risk-weighted assets (RWA) loans as collateral, instead of the natively used cryptocurrencies. MakerDAO has established a Trust, RWA Master Participation Trust, to oversee matters concerning the deal with HV bank.
As part of the agreement, the Trust receives up to 50% of the interest paid on RWA loans repaid by individual and institutional customers of the bank.
MakerDAO noted in the Twitter thread that Ankura Trust will serve as a calculation agent by making sure that “proposed loan participations are eligible for funding according to the eligibility criteria established by MakerDAO.”
Banks Join Crypto Mainstream Adoption
In recent times, many financial institutions have joined the bandwagon of crypto mainstream adoption. Last month, a major South Korean bank, KEB Hana Bank, partnered with the Ethereum-based NFT gaming metaverse The Sandbox, to adopt various metaverse services such as the creation of virtual bank branches.
Swiss digital bank Sygnum is another institution that has adopted the integration of blockchain services. Since it began offering these services in 2019, Sygnum has added support for Ripple’s XRP token. In a recent report, it was revealed that the institution added Cardano’s ADA to its bank-grade staking service.
Source: https://coinfomania.com/makerdao-collaborates-with-u-s-based-bank/#utm_source=rss&%23038;utm_medium=rss&%23038;utm_campaign=makerdao-collaborates-with-u-s-based-bank