US Banks Warm Up to Stablecoins, Raising Fears of Competition for Crypto Issuers
The US banking sector is warming up to stablecoins as major non-bank companies move into the market, causing concerns that traditional lenders could compete with crypto-native issuers like Circle and Tether.
A consortium of over a dozen banks, including Bank of America, Wells Fargo, and Santander, is advancing plans for a commercial-focused stablecoin that would be backed by the US dollar, euro, and other Group of Seven currencies.
The BankChain Alliance has announced its plan to launch a bank-owned blockchain network in 2027 with over 3,000 institutions and $21.8 trillion in assets, which would enable tokenized deposits, stablecoins, smart payment tools, and automated settlement.
Shares of Coinbase (COIN) and Circle (CRCL) edged lower on Wednesday after the news, with CRCL stock down over 3% in midday trade.