VersaBank announced that its wholly owned subsidiary, VersaBank USA, has launched an internal pilot program in the United States for its USDVBs, the US-dollar version of its proprietary Digital Deposit Receipts (“DDRs”) (the “USDVB Pilot Program”). Developed exclusively by VersaBank using its proprietary technology, DDRs are bank-issued tokenized deposits, which are highly encrypted 1:1 digital representations of actual cash deposits that provide superior security, stability, and regulatory compliance compared to stablecoins. They combine the safety and soundness of traditional banking with the efficiency, cost savings, security, and programmability of blockchain technology. The purpose of the USDVB Pilot Program is to demonstrate the functionality, security, and operational integrity of VersaBank USA DDRs in a US dollar environment and to ensure compliance with US banking regulations, including the Bank Secrecy Act (BSA) and Office of Foreign Assets Control (OFAC). The launch of the USDVB Pilot Program is a critical milestone in VersaBank USA’s preparations to commercialize its USDVB in the United States. VersaBank USA will seek the Office of the Comptroller of the Currency’s (OCC’s) “non-objection” prior to launching commercially. VersaBank USA’s USDVB Pilot Program will follow a phased testing program involving thousands of transactions of de minimis value with controlled internal testing and expanding to include limited external deployment with designated deposit partners and their clients. USDVBs will be issued at a rate of 1 USDVB for each US$1.00 on deposit with VersaBank USA. Issuance and redemption and basic management of USDVBs will occur through VersaBank’s proprietary VersaVault digital vault platform on the Algorand, Ethereum and Stellar blockchains and access to and control of USDVBs will be managed through its VersaView e-wallet platform. VersaBank USA expects the USDVB Pilot Program to be completed by the end of calendar 2025 with commercial launch to occur as soon as possible thereafter.