According to the Wall Street Journal, the largest American banks, including JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and other commercial banks, are in preliminary discussions to launch a stablecoin together.
This initiative arises as a strategic response to the increasing competition these banks face from the crypto industry.
Traditional banks dive into the stablecoin market
The report revealed that discussions involve co-owned companies of these banks, such as Early Warning Services and the Clearing House. However, these conversations are still in the early stages.
The outcome will depend on the progress of legislation on stablecoins and market demand. However, the institutionalization of stablecoins has raised concerns. This is due to the widespread adoption of the system during President Donald Trump's administration, which disrupted traditional deposits and transactions. The risk would be even greater if large tech companies or major retailers adopt them.
"The banking industry is in recovery mode in the crypto space after a regulatory crackdown two years ago," noted the WSJ.
Industry regulation advances in the U.S.
The discussions about American banks' stablecoin arise amid the country's growing focus on regulating the sector through the GENIUS Act. Despite opposition, the bill passed a vote earlier this week, with 16 Democrats changing their vote in favor. The GENIUS Act now moves to the Senate for a final vote.
"Next week, the U.S. Senate will vote on the GENIUS Act regarding stablecoins – it will pass," posted Ryan Sean Adams, founder of Bankless.
Adams believes that the passage of the bill will trigger a massive issuance of stablecoins as fintech companies, banks, and social media platforms move quickly to adopt them. He highlighted that most of these entities already have the necessary infrastructure and were waiting for regulatory approval.
Wyoming Senator Cynthia Lummis also highlighted the significant impact of the proposed legislation.
"Stablecoins are not the future, they are the present. Digital assets can facilitate payments 365 days a year, without extra costs," she wrote.
Market projections highlight this urgency. The U.S. Treasury predicted that the stablecoin market could reach $2 trillion by 2028. Additionally, Citigroup's forecast envisions a market capitalization of $3.7 trillion by 2030.
This anticipated growth highlights the transformative potential of stablecoins and the strategic importance of regulatory and market positioning for traditional financial institutions.
The article 'Largest U.S. Banks Want to Launch Stablecoin Together' was first seen on BeInCrypto Brazil.
