Top US banks are in early talks to launch a shared stablecoin through trusted payment networks.
The Senate approved a bill that sets rules for stablecoins and requires strong backing and audits.
Big banks aim to protect their role in payments as stablecoins grow in use and tech firms gain ground.
Several major US banks are exploring a joint stablecoin project. Talks are underway among institutions including JPMorgan, Citigroup, Wells Fargo, and Bank of America. They are reportedly working through Early Warning Services and The Clearing House.
https://twitter.com/WuBlockchain/status/1925722546474721421 Banks Shift Strategy Toward Digital Assets
These banks once questioned the safety of cryptocurrencies. Now, they are considering stablecoins as digital assets gain ground. Their involvement marks a shift in approach as political interest and market maturity increase.
Early Warning Services operates Zelle and is owned by seven leading banks. The Clearing House runs a real-time payment system and includes over 20 major global banks.
Concerns Over Big Tech and Retail Influence
Banks aim to retain control over payment systems and customer relationships. They fear that stablecoins could pull money away from traditional accounts. Big tech and major retailers might also enter the space, increasing competition.
A shared stablecoin could counter these threats. By offering a unified digital payment method, banks hope to maintain their dominance.
Senate Pushes Forward With the GENIUS Act
Lawmakers are taking steps to regulate the stablecoin market. This week, the Senate approved the GENIUS Act. The bill outlines clear rules for companies issuing stablecoins.
It requires full reserves in US dollars or equivalent assets. Issuers with over $50 billion must undergo annual audits. The law also enforces anti-money laundering standards and applies to both domestic and foreign issuers.
Political Factors Complicate Progress
Some Democratic senators want to investigate political ties before final approval of the act. They are reviewing past crypto endorsements by former President Trump. Trump and his sons reportedly supported USD1, a stablecoin launched by World Liberty Financial.
These political connections have drawn scrutiny as the Senate prepares for a final vote.
Stablecoin Market Faces New Competition
Industry analysts see the banks’ stablecoin as a challenge to current leaders. Circle and Tether dominate the market with USDC and USDT. However, a stablecoin backed by major banks could shift market dynamics.
Circle may also be preparing for a sale. Reports suggest discussions with Ripple and Coinbase. Buyers see value in Circle’s large user base and blockchain integrations.
The GENIUS Act has bipartisan support. If passed, it could strengthen oversight and build trust in stablecoin use. Banks are positioning early to shape the future of digital payments.
