A consortium of major banks, including Bank of America, Citi, Deutsche Bank, Goldman Sachs, and UBS, announced on Friday that they will collaborate to explore the development of stablecoins pegged to G7 currencies. A New Era For Crypto In Mainstream Finance The renewed interest in stablecoins comes in the wake of US President Donald Trump’s endorsement of the sector, which has reignited discussions about integrating blockchain technology into mainstream finance. Currently, the stablecoin market is heavily dominated by Tether (USDT), based in El Salvador, which accounts for approximately $179 billion of the total $310 billion in stablecoins circulating, according to data from CoinGecko. The banks involved in this new initiative, which also includes Santander, Barclays, BNP Paribas, MUFG, TD Bank Group, and others, have stated that the goal is to assess whether a collaborative industry offering could enhance competition and bring the benefits of digital assets to the market, all while ensuring compliance. Related Reading: Is The Dogecoin Low In? Analyst Charts Path To $0.60 Notably, France’s Societe Generale recently became the first major bank to issue a dollar-backed stablecoin through its digital asset subsidiary, although it has seen limited adoption, with only $30.6 million currently in circulation. In addition to this consortium, a separate group of nine European banks, including prominent names like ING and UniCredit, is also in the process of launching a euro-denominated stablecoin. Meanwhile, Citi has made strides in the stablecoin space by investing in BVNK, a company focused on stablecoin infrastructure. Demand For Stablecoin Solutions Grows Although Citi has not disclosed the amount of its investment, the co-founder of BVNK, Chris Harmse, told during an interview with CNBC, that the company’s valuation has surpassed $750 million, as reported in its latest funding round. Harmse remarked on the increasing demand for stablecoin infrastructure, particularly with the emergence of regulatory clarity through the passage of the GENIUS Act in the US. This has prompted major US banks to strategically position themselves in the crypto ecosystem. Citi’s CEO, Jane Fraser, has indicated that the bank is contemplating the issuance of its own stablecoin while also exploring custodian services for digital assets. However, Citi is not alone in its pursuit of digital asset integration; JPMorgan Chase has already launched its own stablecoin-like token, JPMD. Related Reading: Crypto Analyst Says Dogecoin Price Is ‘Parabolic Coded’ To $1, Here’s What It Means Banks are increasingly investigating how blockchain technology—originally developed to support Bitcoin—can reduce transaction costs and enhance processing speeds across various financial operations. This exploration includes the concept of tokenization, which involves creating digital tokens that represent traditional assets, such as deposits. For instance, Bank of New York Mellon is currently looking into tokenized deposits, while HSBC has already rolled out a tokenized deposit service. Featured image from DALL-E, chart from TradingView.com
