Banks Unite for Dollar Stablecoin, Threatening Circle's Dominance

A coalition of 21 major banks and financial firms has announced plans to launch their own dollar stablecoin by 2027, sparking concerns for Circle Internet Financial and its USDC token.

The group includes Bank of America, Citi, Goldman Sachs, Wells Fargo, Deutsche Bank, and UBS, among others. According to the statement posted by Wells Fargo, the company plans to form a new entity this year to issue a dollar-backed token in the first half of 2027, with a euro version as the next priority.

Circle's stock fell 6.35% on September 1, following the announcement, while its USDC stablecoin is currently sitting at around $73 billion in circulation.

Analysts have pointed out that Circle's business model relies heavily on USDC reserve income, and the emergence of rival stablecoins could threaten its dominance.

Circle has won regulatory approval for its trust-bank arm, but the banks' consortium aims to replicate the same functionality from within the banking system.