Major US banks are launching joint stubcoins to dodge crypto competition.
Financial heavyweights like JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), and Wells Fargo (WFC) are discussing the subject, the Wall Street Journal reported, citing people familiar with the issue. The talks are still in the early stages and could change, the report added.
Within the consortium there are also payment ventures owned by these banking powerhouses, such as Early Warning Services, which runs Zelle, and Clearinghouse, which processes real-time payments.
Stablecoins are cryptocurrencies that are fixed at the value of another asset, such as Fiat currency or commodity, allowing you to resolve transactions in seconds. Banks are thinking about the potential to improve their business, and international remittances currently spend several days through traditional systems.
One of the ideas that came to mind in the consortium’s talk was the Stablecoin model, open to other banks beyond the core group. Regional banks are also exploring similar paths, WSJ adds, citing sources familiar with the discussion.
Push comes as Washington inch towards regulation. The Senate recently guided and established the US Stablecoin (Genius) Act, which Sen. Hagerty (R-Tenn) said “establishes the first ever pro-growth regulatory framework for stable payments.”
The improved regulatory environment has led crypto companies to seek a charter for banks, putting even more pressure on banks.
Some of these large financial institutions are already in their move. Société Générale launched Eurcv, a Stablecoin denominated in euros, through the Crypto Arm SG Forge in 2023. It is reportedly currently considering launching a US dollar Stablecoin.
Read more: US Stablecoin Bill approval could trigger a long-term crypto bull market: Bitise
