The Bank of North Dakota is moving forward with plans to launch a stablecoin, dubbed Roughrider Coin, for use by local banks, following approval from state regulators on Wednesday. The stablecoin is slated for release this September.
New Digital Payment System for North Dakota Banks
Roughrider Coin is designed to facilitate faster and more efficient bank-to-bank transactions. According to Bank of North Dakota CEO Don Morgan, ten local banks have already expressed interest in participating in a pilot program. “Which is perfect because we desire a wide, diverse selection so that we can fully test it out, make sure it’s working and we build a good foundation,” Morgan said.
Unlike cryptocurrencies such as Bitcoin and Ethereum, Roughrider Coin will be pegged to the value of the U.S. Dollar. Morgan emphasized that the coin is “not a store of value,” “not open to the public,” and “cannot be bought and sold,” functioning solely as a payment mechanism within the North Dakota banking system.
The bank anticipates the development will be “cost neutral,” achieving savings compared to traditional transaction methods. Fiserv, a Fortune 500 financial technology company with which the Bank of North Dakota already has a partnership, is the core vendor for the project. Contract negotiations with Fiserv are expected to be finalized soon.
While the use of Roughrider Coin will be voluntary for North Dakota banks, the Industrial Commission—comprising the governor, attorney general, and agriculture commissioner—unanimously approved the “use case” for the technology. Agriculture Commissioner Doug Goehring previously urged the bank to “proceed with caution,” and Neel Kashkari, president and CEO of the Federal Reserve Bank of Minneapolis, has expressed skepticism regarding stablecoins.
Frequently Asked Questions
What is Roughrider Coin?
Roughrider Coin is a stablecoin developed by the Bank of North Dakota intended to facilitate faster and more efficient bank-to-bank transactions within the state.
Who can use Roughrider Coin?
Roughrider Coin will be available for use by North Dakota banks and credit unions only; it is not open to the general public.
How is Roughrider Coin different from other cryptocurrencies?
Unlike cryptocurrencies like Bitcoin, Roughrider Coin is tied to the value of the U.S. Dollar and is not intended as a store of value or investment.
As the project moves forward, will this new technology truly streamline banking processes for North Dakota institutions?