Banks Unite to Launch Their Own Dollar Stablecoin

Twenty-one major banks, including Goldman Sachs and Citi, have joined forces to launch their own dollar stablecoin. The consortium, which includes European, Asian, Middle Eastern, and African institutions, aims to issue a live token in the first half of 2027.

The new stablecoin will be backed 1:1 by reserves held by the bank-owned entity itself, unlike Circle's USDC and Tether's USDT, which are liabilities of private companies. This change in structure is expected to make the new stablecoin more attractive to institutional clients who prefer to work with established financial institutions.

The banks' decision to launch their own stablecoin comes as they seek to reduce their reliance on Circle and Tether, which dominate the roughly $300 billion stablecoin market. The GENIUS Act, signed in July 2025, has given U.S. banks a federal path to issue stablecoins through OCC-approved subsidiaries.

Circle's stock fell by around 6% following the news, while Tether is also facing increased competition with the launch of Open USD, a stablecoin launched by a consortium including Visa, Mastercard, Stripe, BlackRock, and Coinbase. The new token returns reserve yield to partner businesses rather than keeping it, directly threatening Circle's core revenue model.