21 Banks Line Up Stablecoin Venture, Circle Takes Hit
A group of 21 banks and asset managers has announced plans to create a company that will issue stablecoins. The participants include Bank of America, Citi, Goldman Sachs, and UBS. According to their press release, the entity is expected to be established during the second half of this year, subject to closing conditions.
The new venture intends to launch first with a US dollar-denominated stablecoin in the first half of 2027, which will bring it to market more than a year and a half from now. Other Group of Seven currencies are supposed to come afterward, with a euro-denominated version at the front of the queue.
This is not the first time that Circle's shares have slid due to a competitor announcement. In June, Circle's stock dropped sharply after 140 companies unveiled plans for the Open USD stablecoin, viewed as a head-on challenger to USDC. This time, it's another consortium announcing its own stablecoin.
The group aims to satisfy the requirements of the U.S. GENIUS Act and the European Union's Markets in Crypto-Assets framework. The real pitch is not about speed or breadth of chain support, but rather offering a stablecoin that a bank's compliance desk can sign off on without a lengthy review.
The market has been quick to respond, with Circle's shares sliding roughly 6% on the day, lagging behind most crypto-linked equities. The sector-wide market capitalization has expanded quickly, with DeFiLlama data showing it climb from $200 billion at the start of last year to about $303 billion as of press time.