On July 17, an explosive piece of news shook the financial circle: Bank of America and Citigroup officially announced the advancement of their stablecoin issuance plans, with Morgan Stanley closely following suit. Once the news broke, the global cryptocurrency market instantly boiled — traditional banking giants collectively entered the stablecoin field, which was once regarded as a 'grassroots game.' What hidden intricacies lie behind this?
1. Why are banking giants so 'attracted'?
'We are developing stablecoins, and investors can expect further progress.' This statement from Bank of America CEO Brian Moynihan can be regarded as the most explosive declaration in the financial circle this year. Not long ago, Wall Street scoffed at cryptocurrencies, but now they actively embrace stablecoins — this cryptocurrency pegged 1:1 to the dollar is becoming the 'new favorite' in the eyes of banks.
Citigroup is taking it a step further, with internal documents showing that its stablecoin project has entered the technical testing phase, intending to have compliant third-party custody of reserve assets, aiming to 'enhance the efficiency of cross-border transactions and reduce settlement costs.' Meanwhile, the 'tokenized interbank payment network' led by JPMorgan has already roped in Bank of America, and a 'revolution' against the traditional payment system is quietly brewing.
2. The 'Life-and-Death Race' Under Regulatory Red Lines
However, the ambitions of Bank of America are colliding with the 'gunpoint' of regulation. Just on July 16, the U.S. Senate passed the (GENIUS Act), requiring stablecoin issuers to hold 100% reserves in dollars or U.S. Treasury bonds, publicly disclose reserve details monthly, and even prohibit paying interest to holders — this is equivalent to putting a 'tightening spell' on banks.
But banking giants clearly do not want to sit idly by. Bank of America is participating in SEC regulatory consultations while accelerating its technological layout; Citibank has directly bypassed regulatory disputes, opting for a 'compliant third-party custody' model. Industry insiders bluntly state: 'Banks are racing against time to seize the market before regulations tighten completely.'
3. Stablecoins: The 'New Nuclear Bomb' in Finance?
What magic does stablecoin hold? Data shows that the global stablecoin market has surpassed $180 billion, with a daily trading volume exceeding $100 billion, and the two giants, USDT and USDC, occupy 80% of the market share. However, the entry of traditional banks may completely rewrite the rules —
Trust upgrade: Bank endorsement may end trust crises like 'Tether's reserve fraud'; Cost reduction: Cross-border payment efficiency could increase several times, with fees dropping by 90%; Restructuring: Stablecoins are shifting from 'crypto-native' to 'bank-led,' facing life-and-death challenges from traditional systems like SWIFT.
4. The Secret War of Digital Currencies between China and the U.S.
The actions of Bank of America have left Chinese netizens restless. It is important to note that China's digital yuan has entered the popularization stage, while Hong Kong has just introduced (stablecoin regulations), requiring all stablecoin issuers to obtain licenses. At this moment, the entry of Bank of America into the fray is inevitably interpreted as 'a new weapon of dollar hegemony.'
Experts further warn: 'If stablecoins are dominated by banks, they could become a new tool for the dollar to harvest globally. China needs to accelerate the internationalization of the digital yuan to avoid falling behind in the next generation of financial infrastructure.'
5. The Future: Disruption or Collapse?
Despite the enticing prospects, the 'three mountains' of stablecoins still exist:
Technical risks: Smart contract vulnerabilities and network attacks remain ticking time bombs; Regulatory games: The U.S. House of Representatives is brewing an anti-corruption bill, which may further restrict the powers of banks; Market acceptance: Will ordinary users accept 'bank-issued cryptocurrencies'?
However, regardless, the stablecoin war ignited by Bank of America has already opened the curtain on global financial reform. As a certain crypto analyst put it: 'Either become the rule-maker or be eliminated — this is the survival rule of the financial world.'
What are your thoughts? Feel free to discuss in the comments!!
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