FAQs

• Our purpose is to utilize blockchain to enable an inclusive resilient, and frictionless global economy.

• USDX is a permissionless yield-bearing stablecoin for payments.

• Zero expense ratio
• Internet mobility
• Can be used for yield-bearing collateral, no need to sell
• Fractional shares
• No capital gains or income taxes
• 24/7 trading
• Real-time NAV for underlying mutual fund assets

• No txn fees
• Tax-exempt
• Seamless API
• Permissionless
• Zero counterparty risk
• Daily yield distributions
• Transparent real-time NAV
• Fiat onramps for 200+ countries
• Choose from over 8 payment methods
• Hybrid share class structure
• SEC-regulated, United States domiciled
• Backed 1:1 by US government securities

Mutual Funds

• Reduce cash drag 15bps
• Reduce tracking error
• Collateral for redemptions
• Zero equitization
• Zero fails
• Internet mobility
• Index return on idle cash balances
• Convert MF to ETF no taxes
• Convert ETF to MF no taxes

MMF

• Boosts AUM + fee income
• Reduces cash flow volatility
• Increases daily/weekly assets
• Allows for greater counterparty diversification

Payment Providers

• Reduce prefunding from eight days to four
• Reduce FX fees by 20 to 30 bps
• Focus on corporate strategy over day-to-day operations
• Improved access, reduced cost, faster speed, certainty

Investors

• Daily yield on idle cash
• Low minimums
• Instant + certain settlement with 24/7 minting and redemption
• Yield-bearing collateral

Neobanks

• Yield on idle cash balances
• Low minimum investment
• Instant mint and redemption 24/7/365
• Frictionless collateral mobility

• These benefits arise because idle Visa cash inflows via USDX provide more capital for the fund to invest, improving liquidity and stability. This allows for better risk management, the ability to meet redemptions efficiently, and opportunities to pursue higher yields within established risk limits.

Risk Controls

• Customer-Set Order Size Limits
• Price Protections
• Duplicate Order Check
• Messaging Throttles
• Net Exposure Pre-Trade Limits
• Self-Match Prevention
• Cancel on Disconnect
• “Cancel All” Messaging

• Intra-company payments
• Optimize and mobilize your liquidity among connected entities by moving funds domestically or cross-border 24/7/365, including on holidays.

• Inter-company payments
• Speed up commercial settlement and align treasury processes to the real-time nature of the industry by moving funds domestically or cross-border any day and time of the week including on holidays.

• Merchant acquirers and beneficiaries
• Pay acquirers 24/7, and settle funds with certainty on-demand, multiple times a day and minimize need for prefunding and credit lines.

• Unlock idle working capital and liquidity
• Efficiently leverage your existing liquidity by automatically moving funds cross-border in a “follow the sun” model to draw on liquidity as needed.

• USD offshore clearing for financial institutions
• Instantaneously settle and clear USD minimizing the need to prefund or use of credit lines on nostro accounts for financial institutions at XFT.

• Event driven payments
• Automated real time treasury through the use of Programmable Payments using an intuitive ‘if-this-then-that’ web interface.

• Rebasing, daily.

• Managed distributions

• A closed-end interval fund structure further allows USDX to maintain its $1 peg through controlled redemptions and issuance:

How it works

• When price < $1: Fund buys USDX from market
• When price > $1: Fund issues new USDX
• Scheduled redemption windows prevent runs on the fund
• This creates a stable mechanism for keeping USDX at $1

Regulatory Benefits

• 1940 Act registered with SEC
• Compliant with new dealer rules
• Authorized operation in USA

Redemption, tbd

• Backed by:
• Build America Bonds
• Infrastructure (USDX)
• SLGS securities
• Municipal bonds via closed-end funds trading at a discount to NAV
• Revenue bonds
• Conduit bonds

• Learn more here

• No fees. USDX Rewards are accrued daily on a “net” basis. Real time APY can be found on our website.

Fee Events

• Subscription
• Redemption
• Management
• Transaction
• Deposits
• FX conversion

• Rebasing, daily. System matches the stETH / wstETH model which is a simple and battle-tested model.

Examples

• Rebasing
• Price accrual

• Right to redeem their tokens subject to the terms of the offering memorandum
• Right to receive regular performance reports
• Access to portfolio transparency

• XFT unfortunately cannot provide legal, financial, or tax advice. Our users and investors should consult their tax advisors for any tax considerations. Tax events:

Yield / dividends

• 1. Direct distribution of stablecoin to the holder’s wallet.
• 2. Value accrual to a wrapped vault token, wUSDX, reified upon unwrapping.

Purchase & Redemption

• The USDX token issuance and redemption price is determined by the underlying FOBXX price on the stock market. This price is typically very stable at approximately $1 USD per share with minor fluctuations loosely based on dividend timing. We anticipate that holders of USDX will primarily see dividend-based tax implications.

• Asset eligibility criteria is publicly available on our Investment Mandate: USDX Reserves - Investment Mandate

• No concentration limitations.

• Faster
• Cheaper
• Global
• Secure

• Open and programmable
• Globally accessible
• Available 24/7/365
• Instant settlement at near-zero cost

Other

• Internet mobility + distribution
• Transparent collateral ownership
• Micropayments + granular divisibility
• Instant settlement at near-zero cost
• No prefunding
• No chargeback risk
• No credit/debit card or bank account needed

ETFs

• Economies of scale, lower transaction costs
• Capital risk reduction via diversification
• Reduced dealing costs
• Transparency
• Tax efficiency

Money Market Funds

• Improved cash utilization, increased yield, liquidity

• Reduction in tracking error, slippage

Closed-End Funds

• Stable Pricing: Aligns closed-end fund market price with NAV.
• Investor Confidence: Guarantees NAV exits, attracting capital.

• 1. USDX increases the number of tokens daily to reflect yield.
• 2. This allows for more precise yield distribution, as it can add fractional tokens.
• 3. wUSDX, on the other hand, increases in price, which may lead to slight rounding differences.

• Opportunity to Buy at a Discount
• Efficient Portfolio Management
• Ability to Control Market Price and Timing
• Integration With Brokerage Account
• Leverage Potential
• Clear Commissions
• Lower Expense Ratios
• No Minimums

USDX

USDXW

TENDER OFFER

• Fund announces tender offer window
• USDXW holders can submit shares for redemption
• Fund accepts shares up to specified limit
• Redeems USDXW for underlying USDX at NAV
• In-kind distribution maintains tax efficiency
• USDXW supply decreases?

USER

• UNWRAPPING:
• Tokenized muni basket redemption
• Cash redemption NAV
• USDX redemption NAV

• WRAPPING:
• Create USDXW
• Deliever muni basket
• Deliever cash at NAV
• Wrap USDX at NAV

• 1. Create account via /accounts
• 2. Initiate KYC via /kyc/generate-link and complete verification
• 3. Link external account via /external-accounts
• 4. Fund account (USDC/fiat)
• 5. Mint USDX via /stablecoin/mint
• 6. Access and manage wallet via /wallets

Accrual

• 1. Yield generated from underlying portfolio
• 2. Token price increases (e.g., 1.00→1.01)
• 3. Token supply stays fixed
• 4. Total value increases (price * supply)

Rebasing

• 1. Yield generated from underlying portfolio
• 2. More tokens minted (e.g., 100 tokens → 101 tokens)*
• 3. Token price stays pegged at $1.00
• 4. Total value increases (price * supply)

• Authorization
• 1. Fund accrues yield intraday
• 2. PM submits EOD yield data to Oracle
• 3. Oracle verifies data source and portfolio
• 4. Smart contract validates
• Processing
• 5. addRewardMultiplier adds daily yield to multiplier
• 6. rewardMultiplier updates
• Settlement
• 7. User balances auto-update [shares × new rewardMultiplier]
• 8. Total supply adjusts [totalShares × rewardMultiplier]
• 9. Distribution recorded onchain

ARCHITECTURE

Reward Multiplier

POLICY ENGINE

• 1. Board of directors approves repurchase order
• 2. Notice of repurchase offer sent to shareholders
• 3. File notice on Form N-23c-3 with SEC
• 4. Repurchase request deadline
• 5. Repurchase pricing date
• 6. Repurchase payment deadline

USDX ENGINE

• 1. Investors deposit cash with USDX's custodian.
• 2. USDX selects and invests in money market securities according to the Investment Policy of the Fund.
• 3. Purchased securities are held at USDX's custodian on behalf of the Investors.
• 4. Returns on the portfolio may either be paid to investors periodically or reinvested in the fund.

MONEY MARKET FUND ENGINE

• 1. Investors deposit cash with the MMF's custodian.
• 2. The MMF selects and invests in money market securities according to the Investment Policy of the Fund.
• 3. Purchased securities are held at the MMF's custodian on behalf of the Investors.
• 4. Returns on the portfolio may either be paid to investors periodically or reinvested in the fund.

USDX

• XFT retains a small fraction (20%) of the corresponding yield, with the rest distributed to USDX token holders through rebasing. Success is measured via the following KPIs:

• 1. USDX TVL
• 2. USDX held on EOAs (as proxy for missionary holders
• 3. USDX held in DeFi protocols on Arbitrum, broken by usage (Lending, Perp, DEX)
• 4. Number of USDX holders
• 5. Volume transacted with USDX

• Margins expand with TVL proportionally.

XFT Coin Systems

• XFT makes money by capturing the difference (spread) between the buying (bid) and selling (ask) prices of tokenized assets on our platform.
• Bid/ask spread
• Tokenization
• Redemption fee
• Arbitrage
• Dividend, interest, coupon

UNITED STATES OF AMERICA

• Trump Can’t Stop De-Dollarization
• Russia and Myanmar Discuss National Currency Payment System
• Pentagon Loses Track of $2.5 Trillion
• Pentagon again fails annual audit of $3.8 trillion in military assets
• Pentagon failed to track more than $1 billion in military gear given Ukraine
• DOD Loses Billions Due to Failed Controls and Poor Fund Tracking
• Pentagon's Defense Logistics Agency loses track of $800m
• Pentagon accounting error provides extra $6.2 billion for Ukraine military aid
• $45 Billion in Tax Dollars Goes Missing in Afghanistan
• Pentagon Lost Track of $220B in Military Equipment
• Trump appoints former PayPal exec David Sacks as crypto czar
• US Treasury Calls for Transparency on China’s Currency Swaps
• China finds world’s largest gold deposit worth over $80 billion
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INSURANCE

• What’s up with Buffett and his $325 Billion Pile of Cash?
• KKR Closes $4.0 Billion Health Care Strategic Growth Fund II
• Buffett says U.S. corporate taxes likely to rise to tame deficit
• LA Wildfires Losses Could Top $30 Billion for Insurance Industry
• US insurers slump as Los Angeles wildfire loss estimates hit $20 billion
• KKR Completes Acquisition of Remaining 37% of Global Atlantic
• Berkshire reveals $6.72 billion Chubb stake
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CYBERSECURITY

• Authorities say North Korean hackers responsible for $308M Bitcoin theft in Japan
• Chinese hack of US telecoms compromised more firms than previously known
• Chinese hackers breach US Treasury in major cyber attack
• US healthcare payments network restored 9 months after ransomware attack
• Cyberattack cripples US military pharmacies worldwide
• Cyberattack paralyzes New York prescription system
• Pharmacies across USA struggle to process prescriptions after cyberattack
• Patients struggle to get lifesaving medication after healthcare cyberattack
• UnitedHealth cyberattack still impacting prescription access: “threats to life”
• UnitedHealth hack exposes 100M records in largest-ever US healthcare breach
• Lumma Stealer on the Rise
• Cybercrime to cost US companies $5.2 trillion
• Payments system cyber attack to cost the world $3.5 trillion
• Cyber crime costing the world $8 trillion every year
• US sanctions Chinese firm for hacking 81K firewall devices, potentially deadly
• FCC chair proposes cybersecurity rules in response to China's Salt Typhoon telecom hack
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REGULATION

• Credit Card Competition Act of 2023
• Digital asset broker tax reporting rules finalized
• Treasury and IRS finalize digital asset tax reporting rules
• SEC expands "dealer" definition to include key market participants
• The patent that helped Vanguard pocket big gains expires
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MARKET

• Pershing Square USA, Ltd. Withdraws IPO
• “stablecoins are real” – Jamie Dimon
• Eaton Vance Municipal Bond Fund Announces Extension of Tender Offer
• Stripe acquires stablecoin platform Bridge for $1.1 billion
• Stablecoins find product-market fit
• Fidelity suffers $3.8 billion mutual fund outflows in 2024
• Why now is the time for municipal bonds
• Franklin hits record AUM despite $48 billion in Western Asset Mgmt outflows
• US equity funds saw biggest net outflows in 15 years ahead of Fed decision
• BlackRock ETF Buys First Muni Bonds Issued Through Blockchain
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• Internet mobility
• Low minimums
• No slippage
• No chargeback risks
• Zero counterparty risk
• Programmatically banked
• Prefunded transactions
• No capital gains or income taxes
• No management, performance, transaction fees
• Instant 24/7/365 bilateral settlement
• Quantum resistant cryptography
• Daily yield distributions
• SEC regulated
• Global fiat onramps
• Real-time NAV for underlying assets

• Tax-exempt in-kind redemption
• Yield-bearing collateral
• Smart contract collateral
• Redemption collateral
• Secure payment systems
• Tax management
• Self-custodied bank account
• No management, performance, transaction fees
• Outflow reduction
• Cash drag reduction
• Fractional shares
• Cross-border payments
• Intra-company payments
• Inter-company payments
• Event driven payments
• Tracking error reduction
• Return from low-risk US government securities

Municipal Bonds

• High dividends
• Tax free
• Safe
• Rising NAVs

Closed-end funds

• Managed distributions
• Fixed supply
• Compliance
• Not required to redeem if outflows

• "The one advantage that a closed-end fund or ETF has over an open-end fund is that it cannot be forced to sell stocks because of redemptions. If shareholders in an open-end fund want to redeem more shares than the dividends the fund receives, the fund must sell stock and realize capital gains. In an ETF, shares are redeemed in-kind by institutions, so there is no tax consequence. In a closed-end fund, shareholders cannot have net redemptions; if they want to sell, they must find a buyer on the market."

• Total Return (Yield Driven)
• Diversification
• Professional Management
• Leverage Used by Fund
• Free Leverage of The Discount
• Control: Limit & Stop Orders
• Fixed Capitalization: No Redemption Pressures
• Capitalize on Market Inefficiencies
• Low Active Institutional Ownership / Mostly Retail

Reduced reinvestment risk

• Open-end mutual funds face the challenges of reinvesting incoming cash from new investors and keeping cash on hand to meet investor redemptions. This can disrupt the fund's investment strategy, forcing sales of existing holdings to accommodate new capital.
  
  
• CEFs, on the other hand, avoid this issue. With a fixed pool of capital, the manager can focus on long-term investment decisions without worrying about short-term cash flows. Furthermore, a closed-end fund manager does not need to hold excess cash to meet redemptions, meaning more of the portfolio can be invested.

Flexibility for illiquid assets

• CEFs' historically stable capital base allows them to invest in less liquid assets such as emerging market debt and private equity.
  
  
• Open-end funds with frequent redemptions may struggle to hold these assets, as selling them quickly to meet investor redemptions might be difficult. CEFs, with their predetermined capital, can take advantage of these potentially higher-return opportunities without liquidity concerns.

• Investor gets NAV value vs discount
• Tax efficient in-kind transaction
• Exits at NAV
• Second layer of liquidity for fixed share investment products

USE CASES

• Arbitrage
• Activist prevention

• XFT Municipal Money Market Fund’s investment objective is to seek to provide current income that is exempt from federal personal income taxes while maintaining liquidity and a stable share price of $1. As such it is considered one of the most conservative investment options offered by XFT. Although the fund invests in short-term, high-quality securities, the amount of income that a shareholder may receive will be largely dependent on the current interest rate environment and the availability of eligible municipal securities. Investors in a higher tax bracket who have a short-term savings goal and seek a competitive tax-free yield may wish to consider this option.

• The Fund seeks to provide current income that is exempt from federal personal income taxes while maintaining liquidity and a stable share price of $1.

Investment Goal

• Maintain $1.00 share price
• Tax exemption
• Yield

• RIC status; avoids US income tax if income and gains are distributed.

OR

• Tax exemption via municipal bond portfolio

• Frequent flyer miles and reward points

• Distribute daily variable dollar amounts to maintain $1 NAV per managed distribution policy.

Methods

• Increase distribution if NAV > $1
• Distribute income to avoid NAV growth
• Return capital to offset premium
• Reduce distribution if NAV < $1

• You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon sale of your shares. An investment in the Fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor is not required to reimburse the Fund for losses, and you should not expect that the sponsor will provide financial support to the Fund at any time, including during periods of market stress.

Closed-End Funds

• Financial Instrument Reference Database (FIRD)

    PRICING DYNAMICS
    
    Market Driven
        ETF
        Closed-end funds
        
    NAV Driven
        Mutual Funds shares
        Rebasing tokens
        Accumulating tokens
    

ETF

• AP
• No support for automatic reinvestment and withdrawals

• Creation
• AP delivers basket of securities/cash to ETF issuer
• Issuer provides AP with ETF creation units of equal value
• AP sells ETF units to investors on exchange

• Redemption
• AP accumulates ETF units freom investors
• AP exchanges units with issuer
• Issuer returns equivalent basket of securities/cash to AP

Mutual Fund

Closed-End