Top U.S. Banks Explore Joint Stablecoin to Counter Crypto Threat

Top U.S. banks, including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo, are in early discussions to launch a joint stablecoin. This initiative aims to defend their dominance in the payments ecosystem as cryptocurrency adoption and regulatory support grow. The discussions involve major banking players through entities they co-own, such as Early Warning Services, the operator of peer-to-peer payments app Zelle, and the Clearing House, which runs a real-time payments network. These firms are considering whether to collaborate on a unified digital token that could be used across member institutions and potentially beyond.

The concept remains at an early stage and is subject to change. A final decision would hinge on several factors, including whether there is enough consumer and business demand for a bank-issued stablecoin, and how new legislation shapes the regulatory framework. Stablecoins are digital currencies designed to maintain a one-to-one peg with a national currency like the US dollar. They are backed by reserves such as cash or US Treasurys and are primarily used in the cryptocurrency sector to facilitate trades or store value. However, banks increasingly see them as a promising tool for speeding up traditional financial processes like cross-border payments, which can take days using current infrastructure.

The potential move by the banks comes amid growing signs that the administration is poised to accelerate support for stablecoins. Last month, several crypto-native firms are preparing to apply for banking charters, encouraged by momentum behind a bill called the GENIUS Act. The bill aims to establish a federal framework for stablecoin issuance, allowing both banks and qualified nonbanks to participate. A recent memo noted that the latest draft includes limitations on stablecoin issuance by nonfinancial public companies—an attempt to appease bank lobbyists—but stops short of a complete ban.

Banking leaders fear that if they do not move quickly, deposits and payment activity could be diverted to crypto-native firms or tech giants entering the space. Against that backdrop, banks see a potential opening to reassert their dominance. A bank-backed stablecoin could offer a faster, more secure alternative for domestic and cross-border payments. Some sources said the model under discussion might allow non-owner banks to use the stablecoin, potentially broadening adoption. However, a separate effort by smaller banks to create their own stablecoin has reportedly faced steep operational and strategic hurdles.