Powering the modern bank account: How Dakota and Bridge remove the friction of cross-border finance
Introduction
Dakota is a modern banking platform for institutions, designed to overcome the shortcomings of traditional banks by making global finance faster, seamless, and more secure. To power the platform, Dakota holds customer deposits in stablecoins backed by US Treasuries so clients can move money instantly and globally without high fees.
The traditional banking system operates on decades-old infrastructure that is slow, expensive, and fragmented. By using blockchain technology, Dakota provides a platform that enables faster money movement, greater asset control, and more sophisticated treasury management capabilities.
Challenge
Dakota set out to build a modern banking experience that enables real-time money movement, gives customers full control over their assets, and expands treasury management capabilities beyond what traditional financial systems typically offer. However, achieving this in a secure, compliant, and efficient manner introduced several key challenges:
- Orchestrating transactions in fully owned accounts: Traditional banks manage transactions through internal ledgers, allowing them to control fund movements. With Dakota’s fully owned customer accounts, users retain control of their assets at all times. This required Dakota to coordinate instant, reliable transfers without directly holding or moving funds—while still ensuring compliance and delivering a seamless user experience.
- Managing stability and trust in digital assets: Public stablecoins are designed to maintain a 1:1 peg to the US dollar, but even small deviations can create uncertainty for customers relying on stable, predictable value in their accounts. Dakota needed safeguards to ensure that customer balances remained consistently valued at 1:1 with the USD and protected from potential volatility.
- Protecting against unauthorized transactions: With security and trust at the center of its offering, Dakota sought to proactively implement strict controls to prevent unauthorized transfers of digital assets off-platform, while still delivering a seamless user experience.
Dakota needed a stablecoin partner that could handle issuance, transfers, and redemptions with the same level of security, compliance, and reliability as traditional financial institutions—while preserving the speed and efficiency of modern payment systems.
Solution
Dakota collaborated with Bridge to seamlessly integrate stablecoin flows into wallets, giving Dakota’s users full control over their assets and avoiding reliance on third-party issuers.
Dakota used Bridge’s Orchestration API to integrate stablecoins into its financial workflows, allowing it to transfer funds and handle deposits without managing customer funds directly. With Bridge, Dakota can transfer USD quickly with ACH, Fedwire, SWIFT, and SEPA, making cross-border transactions seamless.
To reduce depegging and security risks, Dakota used the Bridge Issuance API to issue its own stablecoin, DKUSD. Unlike publicly traded stablecoins, Bridge-issued stablecoins like DKUSD are restricted to specific platforms, protecting them from market fluctuations and depegging risks. Bridge ensures all funds are fully backed by US Treasuries and adds an extra layer of security since DKUSD cannot leave Dakota’s platform. Additionally, Bridge manages the reserves and shares a portion of deposit earnings with Dakota, which can be used to fund customer rewards.
Results
The partnership between Dakota and Bridge has transformed Dakota’s ability to operate as a next-generation financial platform. Thanks to its existing integration with Bridge as its orchestration layer, Dakota was able to issue DKUSD with less than a day of development time. The stablecoin proved immensely popular, with approximately 55% of Dakota’s assets transferred to DKUSD within its first few months, avoiding customer exposure to the depegging and security risks of publicly traded stablecoins. Within a year of launching its own stablecoin, Dakota expects 80% of assets on its platform to be held in DKUSD.
With DKUSD, Dakota can now offer a rewards program to increase AUM, increase stickiness, and deliver more value to customers. In the future, Dakota is planning to offer additional stablecoins that are backed by asset classes, such as money market funds and corporate bonds, enabling clients to allocate their stablecoin portfolio based on their specific risk profile.
Conclusion
Partnering with Bridge allowed Dakota to redefine what’s possible in global banking. By seamlessly integrating noncustodial stablecoin transactions, treasury management, and cross-border payments into a single, blockchain-powered platform, Dakota makes it easy for customers to use stablecoins to move money globally without the high fees of traditional formats. With the launch of its own stablecoin, Dakota reduces risk for its customers, improves its overall value proposition, and continues to scale.
“It was very hard to even consider other providers because we were already using Bridge for orchestration. The promise was so compelling to use Bridge for issuance; it was effectively a config change on our side. It took less than a day to implement DKUSD, and soon it will be the vast majority of stablecoins we use.”
“Dakota is building the future of global banking by removing the legacy infrastructure and outdated financial rails of traditional banks. Bridge is excited to provide the stablecoin orchestration and issuance technology that enables Dakota to offer a faster, more secure way for businesses to move money globally.”
