Banks Hijack Crypto's Future, Launching Stablecoin to Compete with Bank Deposits
The banks that crypto was meant to disrupt are now building its future infrastructure. A consortium of 21 global financial institutions, including Bank of America, Citi, Goldman Sachs, and Fidelity Investments, plans to launch a US dollar-backed stablecoin in the first half of 2027.
The consortium's announcement represents a major shift in strategy, as the original group contained only 10 banks when the project was announced last October. The proposed stablecoin will be pegged 1-to-1 with the US dollar and designed for wholesale, institutional, and retail uses, including cross-border payments and digital-asset settlement.
The banks' motivation is clear: stablecoins can compete with bank deposits. A dollar sitting in a traditional checking account supports the banking system's existing business model, while a dollar moved into a stablecoin issued by a nonbank can potentially leave that ecosystem. Bank executives have increasingly recognized this risk as stablecoins have grown.
The proposed venture will combine the banks' existing distribution, compliance systems, customer relationships, and risk-management infrastructure with blockchain settlement, making stablecoins easier for corporations and institutions to adopt. Regulation is helping open the door, with the US Treasury's GENIUS Act expected to take effect in January 2027.