WELLS FARGO, CITI, AND JP MORGAN IN TALKS TO LAUNCH U.S. BANK-BACKED STABLECOIN

- Some of the biggest U.S. banks, including JPMorgan Chase, Wells Fargo, Citigroup, and Bank of America, are exploring a joint stablecoin project.

- According to The Wall Street Journal, these discussions are still early and conceptual.

- The plan involves collaboration with entities like Early Warning Services (behind Zelle) and The Clearing House, a major real-time payment operator used by many banks.

- The goal is to create a shared digital dollar that could streamline payments, especially cross-border transfers, which remain slow and costly in today’s system.

- Banks worry that existing stablecoins, often issued by crypto firms or tech giants, could erode their deposit base and payment dominance.

- Launching their own stablecoin would help them maintain control and stay relevant as digital currencies grow.

Regulatory Progress in the U.S. Senate:

- The bipartisan GENIUS Act recently advanced, proposing a framework for stablecoin oversight, including reserve requirements and transparency rules.

- This has encouraged banks, previously cautious after strict crypto crackdowns in 2022, to reconsider stablecoins as a legitimate tool.

- Bank executives see potential beyond defense. Bank-backed stablecoins could speed up transactions, reduce costs, and help them compete with startups and tech giants.

- A consortium like this could bridge legacy finance and crypto, integrating legacy systems with blockchain innovation.