Banks' Stablecoin Plans Send Circle and Coinbase Shares Plummeting

Circle (CRCL) and Coinbase (COIN) shares plummeted more than 3% after reports that JPMorgan Chase and a consortium of major banks were moving towards issuing their own stablecoins following the advancement of the CLARITY Act.

The news drew attention to the potential for traditional lenders to compete with crypto-native issuers such as Circle and Tether, according to Shay Boloor, a market strategist at Futurum Equities.

Circle's stock was under pressure amid concern that a dollar stablecoin issued and distributed at scale by major banks could reduce the share of the market flowing through Circle and USDC.

The consortium of over a dozen banks, including Bank of America, Wells Fargo, and Santander, is advancing plans for a commercial-focused stablecoin covering the U.S. dollar, the euro, and other Group of Seven currencies.