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TradFi giant Northern Trust (NTRS) will provide custody and cash management services for trade finance focused stablecoin issuer Haycen, the company said in a press release Thursday.
Northern Trust Asset Servicing will be responsible for providing Haycen with global custody services for its client fiat deposits, and Northern Trust Asset Management will provide cash sweep services, the company said.
Stablecoins are cryptocurrencies whose value is tied to another asset, such as the U.S. dollar or gold. They play a major role in cryptocurrency markets and are also used to transfer money internationally.
Haycen is a trade finance digital payments provider, with operations in the U.K. and Europe. The company offers wholesale stablecoin-based solutions for non-bank lenders in global trade.
Trade finance is a vital part of global commerce that is ripe for modernization. The industry is still reliant on manual workflows and can be expensive for banks and companies involved.
Access is also an issue. Smaller sized businesses are prevented from accessing trade finance due to the costs and complexity of the existing system. This is where stablecoins can help.
Haycen offers increased availability to U.S. dollars via stablecoins, combined with instant settlement, thereby reducing the traditional friction associated with cross-border transfers.
"Global trade is an incredibly important part of the economy and a fantastic market for us as a stablecoin solution; the global flow of goods and services relies on liquidity moving unencumbered and successive regulatory changes have forced banks to scale back trade lending operations," said Luke Sully, founder and CEO of Haycen, in emailed comments.
"That’s left a gap in the market for non-bank players looking for new ways to move the $2 trillion of annual flows, 95% of which is denominated in USD," Sully said, adding that "for these participants, using stablecoins combines yield enhancement with the certainty of instant free global settlement."
Haycen has received funding from the U.K. government to develop institutional-grade stablecoins.
These cryptocurrencies have been grabbing headlines this week.
Fidelity Investments is in advanced stages of developing its own stablecoin, the Financial Times reported on Wednesday.
World Liberty Financial (WLFI), a decentralized finance protocol backed by U.S. President Trump, also confirmed its own plans to launch a stablecoin.
Read more: Trump-Backed World Liberty Financial Confirms Dollar Stablecoin Plans With BitGo