CDD is a proposed consortium structure under which the reserves behind payment stablecoins would be held as deposits at community banks, CDFIs and MDIs, so that growth in digital dollars funds local lending instead of leaving town. It is a design under legal review, not a live product, and we say so on every page.
The Founding-Bank Readiness Assessment is a six-week, board-ready study run to a published method and reviewed by an independent community bank finance advisor. It is the first step into a bank, and it is deliberately separate from anything CDD would sell. The assessment may recommend against adopting CDD, and when it does the memo will say so in plain terms.
Funding exposure, customer demand, options and operating model, and a recommendation. Your data, your customers, your decision meeting.
Act, partner, monitor, or pass, with triggers, an owner, and a review date. Three of the four outcomes do not involve CDD.
A small, controlled pilot with an explicit spend cap, proposed only where the memo identifies a sponsored use case, a vetted legal path, and unit economics that work.
A reconciliation and controls layer for instructions, reserve movements, approvals and redemptions, scoped so a bank can adopt it on a path that does not include CDD.
The core idea: when a payment stablecoin is issued, dollars are set aside as reserves. Today those reserves sit mostly at the largest custodians. CDD proposes a consortium of community banks, CDFIs and MDIs whose members would hold those reserves as deposits, keeping the funding in the communities the dollars came from. Everything below is a design under legal review, written in the conditional because it does not yet exist.
Community banks and credit unions would join a consortium with shared issuance infrastructure while keeping their own charters, customers and lending decisions. Whether the consortium could operate under one regulatory application, or each member would need its own approvals, is a question for counsel and is not assumed. wording pending counsel
Reserves behind issued digital dollars would be held as deposits at consortium members rather than in a money market fund or at a single large custodian, distributed by a published priority method that considers each member's capital position and community lending capacity.
Stable reserve deposits would support local small business, housing and agricultural lending, subject to each member's own underwriting, liquidity and concentration limits. Whether reserves placed this way count as brokered deposits, and what that means for each bank, is part of the readiness assessment.
Every instruction, reserve movement, approval and redemption would be independently reconcilable by the bank and its examiners. Scoped separately so a bank could adopt it on any path, including one that does not involve CDD.
An insured deposit is a bank's obligation to its depositor, covered by the FDIC up to the applicable limit if the bank fails. A payment stablecoin is a claim on its issuer, redeemable for dollars, backed by reserves the issuer holds. Some of those reserves may themselves be insured deposits at a bank, but the insurance protects the issuer's account at that bank, not the person holding the coin. If a community bank held CDD reserves, the bank would have a deposit from the issuer; the customer holding the digital dollar would not have an insured deposit at that bank. Banking counsel will verify this description and the exact structure before it is used in outreach.
A bank's own liabilities on new rails, with balances that never leave its balance sheet, is the most serious alternative to reserve routing. The readiness assessment compares both. Where tokenized deposits fit a bank better, the memo will say so.
The design contemplates a graduated wallet-to-account pathway for customers without conventional credit history. Whether an on-ramp for customers without a Social Security number is legally and operationally viable depends on the institution's customer identification program and current rules, and we will not describe it as available until that is settled.
A U.S. provisional patent application covering the consortium architecture, reserve distribution method, and related processes was filed in February 2026. No patent has been granted. A filing describes an application, not freedom to operate or a validated control.
Payment stablecoins may become a useful instrument for some of your customers. Balances that move off your books to hold them may or may not come back. The exposure depends on which customers, which use cases, for how long, and where the reserves behind those dollars are held. Your board needs a quantified answer before anyone needs a token.
| Bank problem | Decision question | What the assessment answers |
|---|---|---|
| Deposit migration | Which balances might leave, for how long, and at what replacement cost? | Segmented exposure under a modest and a severe scenario, with replacement funding cost and liquidity effects. |
| Customer payments | Which customers value faster or extended-hours settlement enough to adopt? | Interviews with a bank-selected sample of business customers: actual delays, volumes, costs, and reasons to keep balances. |
| Execution burden | Should the bank act, partner, monitor, or pass? | A comparison of existing rails, third-party providers, tokenized deposits, and consortium reserve routing. |
| Auditability | Can instructions, reserve movements, approvals and redemptions be independently reconciled? | A controls and evidence review scoped to whichever path the bank is considering. |
CDD proposes one of the paths the assessment compares. That is a conflict of interest, and we address it in the structure rather than asking you to take our word for it.
Segment deposit balances and concentration. Define a modest and a severe behavior scenario using the definitions published below. Estimate replacement funding and liquidity effects. Identify transfers within and outside the bank.
Interview a small, bank-selected sample of business customers about actual payment delays, volumes, current costs, willingness to switch, and reasons to keep balances where they are. The bank controls invitations and consent.
Compare existing rails, a third-party provider, tokenized deposits, and a consortium reserve-routing path. Examine technology, vendor oversight, legal structure, AML and sanctions, operational resilience, reconciliation, and customer disclosures.
Recommend act, partner, monitor, or pass, with triggering conditions, owner, timing, expected economics, key assumptions and unresolved issues.
A modest and a severe scenario are always reported, but the migration shares behind them are set from each bank's deposit mix, concentration and customer interviews, not from a universal number. The 5% and 25% shown in the calculator below are editable examples. Neither scenario is a forecast. Replacement cost uses the bank's own marginal wholesale funding spread.
Reserve placement that benefits a consortium can leave an originating member worse off. Gross reserve inflow is never presented as net funding benefit.
Joe Kenner, a former community bank CFO and asset-liability management leader, reviews each bank's deposit exposure, replacement funding assumptions, liquidity effects and board recommendation. His role is to challenge the analysis, including cases where CDD would not benefit the bank. The scope of that role, its budget and its conflict rules are set out in the engagement agreement before the first bank starts.
The method is published now. Aggregate outcomes will be published only once the number of completed assessments and the banks' permissions allow it without revealing any single institution's decision. With three founding banks, reporting how many chose pass could identify one; we will not do that.
Aggregated data wherever it answers the question. No customer identifiers collected when segment totals suffice. Work product ownership, confidentiality, and security controls are covered in a short written agreement.
A redacted board memo template will be published here before the first engagement begins. Six pages: exposure range, customer signal, options compared, recommendation, triggers, open issues.
This is the arithmetic behind workstream one, simplified to illustrate how the pieces relate. It is not a prediction of any bank's result. It runs entirely in your browser and nothing you enter is stored or sent. Defaults show an illustrative $500 million bank with example scenario shares; they are not any bank's data. funding math pending bank CFO review
Off by default. A reserve inflow counts as a benefit only after its origin, price, stability, concentration and regulatory treatment are assessed for your bank.
| Line | Modest | Severe |
|---|---|---|
| Mobile balances as share of deposits | ||
| Gross outflow | ||
| Incremental funding cost of replacing it | ||
| Gross reserve inflow | ||
| Of which originated at this bank (not new money) | ||
| Stable, new reserve funding after haircut | ||
| Net funding change (outflow, less any included reserve inflow) | ||
| Illustrative annual funding effect at the replacement spread |
With the reserve inflow excluded, the illustration shows only the deposit migration side. When included, it counts only the stable, new portion of that inflow against gross outflow, and even that is a placeholder. Reserve deposits placed through an issuer or consortium may be classified as brokered, which affects FDIC assessment rates, liquidity ratios and examiner treatment; the haircut is a crude stand-in for that until counsel and your ALCO have a view. The full assessment replaces every input here with your call report segments, your marginal funding curve, and interviewed customer behavior.
One rural or agricultural lender. One bank with material small business operating balances. One CDFI or MDI with a credible institutional payment or deposit sourcing channel. Preference for at least one institution with banking-as-a-service or fintech partnership experience. Credit unions after the method is adapted to their charter.
An executive sponsor. Access to aggregated deposit data. Introductions to a small sample of business customers, on the bank's terms. A final decision meeting with the executive team or board. Permission for an anonymized case study is requested; a reference is requested separately, and only after value is demonstrated.
No professional fee for founding banks. The published methodology, applied as written. A board memo that has been through independent bank finance review. A written agreement covering scope, data minimization, security controls, ownership of work product, confidentiality, conflicts and any follow-on procurement. We expect and welcome your third-party risk review.
Six weeks per assessment, subject to data availability. Founding slots are limited to three so that each engagement gets the attention the method requires; whether to expand to five is decided after the third, on delivery effort and bank response. Founding banks receive the assessment without a professional fee. A standard price for later assessments will be published once actual delivery hours and demand from the founding cohort are known; founding banks will be asked what they would have paid.
This table is reviewed by counsel before each update. Nothing on this site should be read as a statement that CDD, or any bank, is authorized to issue payment stablecoins.
| Item | Status | As of |
|---|---|---|
| GENIUS Act (Pub. L. 119-27) | Enacted 18 July 2025. Takes effect on the earlier of 18 January 2027 or 120 days after primary federal regulators issue final implementing rules. | 18 Sep 2026 |
| Implementing rules | OCC, FDIC, NCUA and Treasury have issued proposals. No primary regulator had finalized rules as of mid-2026; 18 January 2027 is the working effective date. Federal Reserve rulemaking to be added for state member banks. | 18 Sep 2026 |
| Issuer-paid yield | Prohibited for permitted issuers under the Act. Treatment of rewards paid by affiliates or exchanges was still contested in pending legislation. | 18 Sep 2026 |
| CDD issuer application | None filed. | 18 Sep 2026 |
| Consortium | None formed. Structure under legal review. | 18 Sep 2026 |
| Patent | U.S. provisional application filed February 2026. No patent granted. | 18 Sep 2026 |
| Trademark | CDD™ mark in use. Registration status under confirmation. pending counsel | 18 Sep 2026 |
| Founding assessments | Three slots open. None completed. Aggregate outcomes will be published here once the sample and bank permissions support it. | 18 Sep 2026 |
| Counsel review of this site | Initial review in progress. Statements tagged "wording pending counsel" are interim and will be replaced or removed on counsel's advice. | — |
Bankers, examiners and counsel will want to know who is on the other side of the table.
Scope: deposit exposure under two published scenarios, customer demand interviews, an options comparison including paths without CDD, and an independently reviewed board memo. Selection: an executive sponsor, usable aggregated data, access to a small customer sample, and a commitment to a final decision meeting. Three founding banks first; a decision on expanding to five follows the third. We reply to every application, and if your institution is not a fit we will say so and tell you why.