The Federal Deposit Insurance Corp. on Friday approved Augustus’ application for deposit insurance.
Augustus, previously Ivy, aims to speed up payment settlement to adjust for artificial intelligence.
“The existing clearing model runs on legacy correspondents that are closed 115 days a year, built for humans, and take two days to settle,” the company said in a LinkedIn post in May.
“Legacy banks are made of paper, Augustus is made of code,” the firm’s co-founder, Ferdinand Dabitz, said in a separate statement.
The company received the Office of the Comptroller of the Currency’s conditional approval in May to operate a national bank.
Augustus acknowledged the FDIC approval in a LinkedIn post Tuesday.
“We're building the Global Dollar Bank – direct, programmable dollar access for financial institutions around the world,” the company wrote. “Every approval brings that closer, and reflects the care we're putting into building it on solid foundations.”
The bank must also get approval from the Federal Reserve before opening.
As part of the FDIC agreement, Augustus’ banking operations, based in Dallas, will launch with at least $73,660,000 in capital funds.
The bank will also be subject to the community bank leverage ratio framework and must maintain a leverage ratio of 10% or greater throughout its first three years.
The bank is set to provide deposit and lending products, virtual currency services, payment services and treasury services to digital asset companies, high net-worth individuals, technology companies and international financial institutions, the FDIC said.
Augustus’ subsidiary, Juno Moneta, will deliver stablecoin services, including issuance and redemption of in-house and partner stablecoins, as well as custody, conversion and payment functionality, the regulator said.
Augustus must obtain the FDIC’s approval ahead of any changes in the bank’s proposed management. The FDIC must also sign off before 10% or more of the bank’s stock changes ownership or control, the agency said.
Additionally, any proposed bank director or senior executive officer living outside the U.S. – or who is not a citizen – must sign a consent to jurisdiction, the FDIC said.
The bank must open within a year or the FDIC’s approval will expire.
Further, the FDIC may alter, suspend or withdraw its approval if any development ahead of the bank’s opening is deemed severe enough, the agency said.
