Banks Launch Stablecoin Challenge to Tether and Circle

A consortium of over 12 major global banks is launching its own stablecoin on public blockchains, challenging the dominance of Tether and Circle in the $308 billion market. The move marks a shift from lobbying against stablecoins to competing directly with them.

The GENIUS Act, enacted on July 18, 2025, provides regulatory clarity for bank stablecoin issuance through OCC-approved subsidiaries. This legislation effectively creates a regulatory moat that banks can utilize to enter the space.

Banks such as Bank of America, Wells Fargo, and Santander are part of this consortium, which plans to start with USD-backed 1:1 assets before expanding into EUR and other G7 currencies. The focus is on building a network effect mirroring the global reach of USDT and USDC.

The transition from traditional banking to public-chain issuers comes with operational friction, including navigating transparency requirements and compliance issues. Banks must now compete on trust, liquidity, and integration with existing financial rails, rather than paying interest directly to holders.