According to the Wall Street Journal, major US financial institutions, including JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and other commercial banks, are reportedly engaging in preliminary discussions to launch a stablecoin jointly.
This move comes as a strategic response to the growing competition these banks face from the cryptocurrency industry.
Traditional Banks Dive Into Stablecoin Market
The report revealed that the discussions involve companies co-owned by these banks, such as Early Warning Services and the Clearing House. However, these talks remain in the early stages.
The outcome would depend on the progress of stablecoin legislation and market demand. Notably, Bank of America’s CEO hinted at a possible stablecoin launch back in late February.
Now, this latest initiative reflects a broader shift within the banking sector. It has been driven by concerns over the potential widespread adoption of stablecoins, particularly during President Donald Trump’s administration.
This could disrupt traditional deposits and transactions. The risk is especially significant if big tech companies or major retailers adopt them.
“The banking industry is in catch-up mode in the crypto space after a regulatory crackdown two years ago,” WSJ noted.
Meanwhile, the conversations emerge amid the country’s increased focus on regulating the sector through the GENIUS Act. Despite the opposition, the bill passed a cloture vote earlier this week, with 16 democrats changing their vote in favor. The GENIUS Act now heads to the Senate for a final vote.
“Next week the US senate will vote on the GENIUS stablecoin act – it will get passed,” Bankless founder Ryan Sean Adams posted.
Adams believes the bill’s passage will trigger a massive issuance of stablecoins as fintech companies, banks, and social media platforms move quickly to adopt them. He noted that most of these entities already have the required infrastructure and have been waiting for regulatory approval.
Wyoming Senator Cynthia Lummis also stressed the significant impact of the proposed legislation.
“Stablecoins aren’t the future, they’re the present. Digital assets can facilitate payments 365 days of the year, without the extra costs,” she wrote.
She described the act as a ‘thoughtful and well balanced approach’ necessary for the US to preserve and expand its leadership in financial investments. Lummis emphasized that maintaining American dominance in digital finance is crucial and called for efforts to ensure that leadership stays within the US rather than moving to other nations.
Market projections underscore this urgency. The US Treasury has predicted that the stablecoin market could surge to $2 trillion by 2028. Furthermore, Citigroup’s forecast envisions the market capitalization at $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.
Figure Markets
eToro
eToro
eToro
eToro
Plus500
Arkham
Moonacy
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
