Banks Plan Dollar-Backed Stablecoin Launch for Early 2027

Big banks are planning to launch their own dollar-backed stablecoin in the first half of 2027. The new company, backed by a group of 21 institutions including Goldman Sachs and Bank of America, aims to create a token that tracks the US dollar.

The banking group wants to enter a market dominated by specialist issuers, led by El Salvador-based Tether, which has issued over $180 billion in its dollar token. The stablecoin's business model relies on collecting dollars and parking them in low-risk assets like Treasury bills, earning interest in the process.

The bank-led coin poses a choice for the industry: keep it non-interest-bearing or share yield to attract users. If the second path is taken, it could raise big banks' funding costs by making deposits more 'contestable' and squeezing net interest margins.