US Banks Advance Stablecoin Plans as Coinbase and Circle Stocks Drop
Major U.S. banks are moving closer to launching their own stablecoins, a development that has sent shares of Coinbase (COIN) and Circle (CRCL) downward. The BankChain Alliance, a consortium of over 3,000 financial institutions with $21.8 trillion in assets, plans to build a bank-owned blockchain network by 2027. This network will support tokenized deposits, stablecoins, smart payment tools, and automated settlement, while remaining interoperable with other blockchain systems.
The consortium, which includes giants like JPMorgan Chase, Bank of America, Wells Fargo, and Santander, is exploring stablecoins backed by the U.S. dollar, the euro, and other Group of Seven currencies. JPMorgan Chase has been in preliminary discussions about a potential stablecoin, though no product is currently in development. The move comes as banks increasingly view stablecoins as a way to compete with crypto-native issuers like Circle and Tether.
The announcement coincides with ongoing uncertainty surrounding the Digital Asset Market Clarity Act (CLARITY Act), which has yet to pass the Senate. Market strategist Shay Boloor from Futurum Equities noted that Circle's stock is under pressure due to concerns that major banks issuing their own stablecoins could reduce market share for Circle and its USDC stablecoin. On Wednesday, CRCL stock fell over 3%, while COIN stock also dropped over 3% in midday trading.
Despite the stock declines, retail sentiment on Stocktwits remained in the 'extremely bullish' zone for COIN, while CRCL sentiment dropped to the 'bullish' zone. The BankChain Alliance's initiative is seen as a way for banks of all sizes to build modern payment rails while complying with regulatory standards, potentially reshaping the future of digital banking.