US Financial Institutions Pondering Collaborative Digital Currency Development - Alleged News
In a significant development, four major U.S. banks - Citigroup, Bank of America, JPMorgan Chase, and Wells Fargo - are in discussions to create a consortium for issuing a shared stablecoin. This collaboration, reminiscent of their earlier cooperation in creating payment networks like Visa and Mastercard, is aimed at retaining deposits and gaining scale amid increasing stablecoin adoption (source 1, 2025-07-17).
Banks view stablecoins as both a threat and opportunity. On one hand, they could lose revenue from cross-border payments and retail card payments if stablecoins are used extensively. On the other hand, they could offer seamless off-ramp services for stablecoins, making a bank stablecoin more usable for non-crypto users.
JP Morgan has Kinexys for Digital Payments (formerly JPM Coin) for instant 24/7 cross-border payments to corporate clients and other financial institutions. Citi has its Token Services for cross-border payments. Meanwhile, JP Morgan processes $10 trillion in US dollar payments per day and stands to lose significant revenue if a joint stablecoin is adopted by corporates.
The likely imminent passage of the Genius Act stablecoin legislation in the United States is spurring banks to act. The institutional infrastructure to make this happen is largely already in place, with JP Morgan having a tokenized collateral service and Broadridge having an intraday repo solution that tokenizes Treasuries.
Early Warning Services, responsible for Zelle, and The Clearing House, which operates the real-time payments network, are potential vehicles for the stablecoin. Other projects around the world, such as Project Agorá, Regulated Settlement Network, Regulated Liability Network, and Commercial Bank Money Token, are also exploring the use of blockchain for interbank payments and cross-border payments.
However, a previous attempt at creating an interbank system on a permissionless blockchain, the USDF Consortium in 2022, moved to a private chain due to regulator pressure and eventually shuttered. This serves as a reminder of the regulatory challenges that banks may face in their stablecoin endeavours.
The use of stablecoins keeps banks a part of the competitive infrastructure in tokenization. Fnality, backed by 20 institutions, tokenizes central bank money for institutional payment usage and is live in the UK, working on going live in the United States. JP Morgan and Deutsche Bank are participants in Partior, another tokenized cross-border payment network.
Large banks see collaboration in a stablecoin consortium as a way to gain scale and retain deposits amid increasing stablecoin adoption, while smaller banks may rely on technology providers or global stablecoin issuers (source 2, 2025-07-21). No information from the results indicates other named banks currently joining this initiative beyond the major four listed above. Visa and Mastercard also remain active in stablecoin-related infrastructure but are separate from the joint stablecoin consortium among the banks.
Ledger Insights has published a report on bank adoption of stablecoins, tokenized deposits, and DLT payments, exploring design features and avoiding pitfalls that could limit their longer-term potential. The report serves as a valuable resource for banks as they navigate the complex landscape of stablecoins and their potential impact on the financial industry.
- The four major U.S. banks - Citigroup, Bank of America, JPMorgan Chase, and Wells Fargo - are considering creating a consortium to issue a shared stablecoin, reminiscent of their earlier cooperation in creating payment networks like Visa and Mastercard.
- The banks view stablecoins as both a threat and opportunity, with potential losses from cross-border payments and retail card payments if stablecoins are used extensively, but also the opportunity to offer seamless off-ramp services for stablecoins to non-crypto users.
- JP Morgan has Kinexys for Digital Payments and a tokenized collateral service, while Citi has its Token Services for cross-border payments. However, the banks could stand to lose significant revenue if a joint stablecoin is adopted by corporates.
- The institutional infrastructure for this stablecoin endeavor is largely already in place, with JP Morgan having a tokenized collateral service and Broadridge having an intraday repo solution that tokenizes Treasuries.
- Despite a previous attempt at creating an interbank system on a permissionless blockchain failing due to regulator pressure, banks are still exploring the use of blockchain for interbank payments and cross-border payments, as seen in projects like Project Agora, Regulated Settlement Network, or Commercial Bank Money Token.
