Minting and Redemption
Institutional minting and redemption flows for VNX stablecoins, with eligibility, KYB, and fiduciary funding.
Overview
VNX stablecoins (VCHF, VGBP) are minted upon confirmation of fiat funding of the segregated fiduciary account, and redeemed at par at any time per customer instruction. The flow supports two execution paths on the mint side (new issuance against new reserve, or proprietary-trade fill from VNX's liquidity pool) and two paths on the redeem side (direct cancellation against reserves, or buyback into the liquidity pool). An optional crypto-conversion leg is available on either side via VNX's external regulated provider. This page is the institutional-track summary; see Developer Track for sequence-level integration.
Actors
Customer (institutional, verified) — initiates the mint or redemption.
Customer's bank — wires fiat to VNX bank account.
VNX Platform — order management, balance check, ledger updates, and customer interface.
VNX Bank Account — segregated client bank account used for receiving and disbursing client fiat funds..
Fiduciary Bank — holds the stablecoin reserves.
VNX Liquidity Pool — proprietary-trade source/sink for stablecoins.
VNX Transitional Wallet — receives virtual-asset funding before AML check.
External regulated provider — external regulated provider for fiat↔crypto conversion.
Compliance Engine — AML/ATF, sanctions, Travel Rule.
Sequence diagram
Step-by-step
Funding — Customer wires fiat to VNX bank account; due diligence completes; funds credited to platform user account.
Order — Customer orders stablecoin purchase on platform.
Issuance path (Option 1) — VNX moves fiat into the fiduciary reserve, reserve grows, stables minted to customer wallet (≈1 business day).
Prop-trade path (Option 2) — VNX sells customer previously-issued stables from its liquidity pool (≈1 business day).
Virtual-asset funding — Customer transfers crypto to VNX transitional wallet; AML check at the Collective Customers' Wallet; conversion via the external regulated provider; stables delivered (≈3 hours, subject to Travel Rule).
Redemption (R1-R3) — Customer instructs redemption; direct cancellation against the fiduciary reserve, or buyback into liquidity pool; fiat released to customer bank (≈1 business day).
Optional crypto conversion (R4) — Customer may receive proceeds in crypto via the external regulated provider (≈3 hours).
Withdrawal — Customer withdraws proceeds (fiat or crypto) from platform.
Edge cases and failure modes
Compliance hold — sanctions or AML hits trigger Enhanced Due Diligence; tokens may be held pending EDD.
Travel Rule timeout — counterparty data not delivered in time; transfer queued or rejected per policy.
Depeg threshold — if the depeg threshold (>0.5%/24h investigation; >1% disclosure) is met, public disclosure and BMA notification follow.
Redemption pressure — daily redemptions >10% of supply trigger liquidity-position review and emergency reserve-tranche access.
Wallet not whitelisted — delivery to external wallet blocked until whitelisting completes.
Customer eligibility — VCHF/VGBP minimum transaction threshold is CHF/GBP 100,000; verified Customers only.
Controls and reconciliation
Daily reconciliation matches bank balances and on-chain wallet balances to the internal ledger. M-of-N multi-signature signing (minimum two signatories) controls minting and burning. Audit logs and approval evidence are retained for at least five years. Co-mingling is prohibited by both VNX and BCB.
Related
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