US Banks Weigh Stablecoin Issuance Amid Intensifying Competition
US banks are accelerating plans to issue their own stablecoins as they seek to protect their deposit base and payments businesses from increasing competition. JPMorgan Chase has been discussing a potential launch of its own stablecoin, although the bank says it currently has no plan to do so.
A group of over a dozen financial firms, including Bank of America, Wells Fargo, and Santander, are reviewing a proposal for a joint issuance model. The plan would involve starting with a dollar-backed coin for corporate banking before expanding to other major currencies.
Regional and midsize banks are taking a separate approach. The Bankchain Alliance, which includes state bankers associations from 39 US states, is working on a blockchain platform operated directly by banks. The platform aims to support cash management, supply-chain finance, tokenized deposits, and stablecoin functions, with a target launch in the first half of 2027.
The shift towards issuing stablecoins has been driven in part by nonbank entrants, including crypto firms such as Tether and Circle, as well as traditional finance and technology companies like Visa, BlackRock, Google, and DoorDash. Banks are concerned that if these companies expand payments and remittance services using stablecoins, lenders' core revenue streams and customer relationships could come under pressure.
Competition is intensifying, with crypto firms pushing into banking. World Liberty Financial, linked to the family of President Donald Trump, has received preliminary conditional approval from the Office of the Comptroller of the Currency to establish a bank, which would allow it to issue the dollar-pegged stablecoin USD1, valued at around $4 billion.