Michigan-based mortgage lender LitFinancial has launched its new U.S. dollar stablecoin, litUSD, on the Ethereum blockchain, signaling a significant expansion in the digital dollar movement beyond those entrenched in cryptocurrency. The introduction of litUSD aims to reduce funding costs and enhance treasury management, while also exploring innovative solutions for on-chain settlement of mortgage payments. This advancement has the potential to publicly track loan performance, which could fundamentally alter liquidity in the secondary mortgage market.
The rise of stablecoins, digital currencies pegged to traditional fiat currencies like the U.S. dollar, reflects their increasing adoption as a viable payment alternative. These assets promise to facilitate faster, less expensive transactions through blockchain technology. Projections from Keyrock suggest that stablecoin payment volumes may reach an impressive $1 trillion by 2030, driven by recent regulatory advancements and broader institutional interest, especially following the signing of the GENIUS Act by former U.S. President Donald Trump in July.
Tim Barry, CEO of LitFinancial, emphasized the growing importance of stablecoins in modern treasury operations. He stated, “With litUSD, we’re building resilience and adaptability into our business model while pioneering how mortgage finance can evolve with blockchain technology.” The litUSD token, structured as an ERC-20 on the Ethereum platform, is completely backed 1:1 by cash and cash equivalents held in reserve. Barry noted that Ethereum was selected for its stability and decentralized characteristics, aligning with U.S. domestic policies.
The logistics of litUSD’s issuance and redemption are managed by Brale, a FinCEN-registered money services business. Meanwhile, advisory firm Stably is involved in shaping token economics and facilitating integration with decentralized finance (DeFi). Consumers are able to mint and redeem the stablecoin through bank transfers or Circle’s USDC, utilizing Brale’s verified business accounts.
Founded in 2024, LitFinancial has quickly grown to employ over 100 staff members and anticipates an annual mortgage origination run rate exceeding $1 billion by 2026. The company boasts a leadership team comprised of seasoned professionals from Rocket Mortgage and Coinbase, positioning itself to be a formidable player in the evolving landscape of mortgage finance.
