Top U.S. Banks, Including JPMorgan, Citi, and Bank of America, Consider Collaborative Launch of Stablecoin: WSJ

Major banking institutions in the U.S. are considering a collaborative stablecoin initiative to counteract competition from cryptocurrency markets.

Prominent banks such as JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo have engaged in discussions about this venture, according to reports from sources familiar with the conversations. These discussions are presently preliminary and subject to evolution.

Included in this group are payment entities associated with these banking giants, such as Early Warning Services, the operator of Zelle, and The Clearing House, which focuses on real-time payment solutions.

Stablecoins are digital currencies linked to the value of other assets, such as fiat currencies or commodities, allowing for quick transaction settlements. Financial institutions recognize the potential of stablecoins to streamline operations, particularly considering that international remittances can take several days through conventional methods.

One proposal mentioned in the consortium’s discussions is a stablecoin architecture that would be accessible to other financial institutions beyond the initial members. Regional banks have also been looking into similar opportunities.

This initiative aligns with ongoing regulatory advancements from U.S. lawmakers. Recently, the Senate moved forward with the Guiding and Establishing National Innovation for U.S. Stablecoin (GENIUS) Act, described by Senator Hagerty as a foundational regulatory framework for stablecoins focused on growth.

The increasingly favorable regulatory landscape is prompting cryptocurrency firms to pursue bank charters, further increasing competitive pressure on traditional banks.

Several major financial institutions have already taken concrete steps in this direction. For instance, Société Générale introduced a euro-pegged stablecoin, EURCV, in 2023, and is reportedly exploring the launch of a U.S. dollar stablecoin as well.