US Banking Giants Quietly Explore Launching Joint Crypto Stablecoin To Compete With USDT, USDC

Major U.S. banks are weighing forming a potential consortium to issue a joint stablecoin to challenge the dominance of Tether and Circle’s stranglehold over the ballooning $245 billion stablecoin market. Wall Street Banks In Early Talks For Joint Stablecoin Venture According to a Wall Street Journal report , talks are ongoing between financial heavyweights, including JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and others through their co-owned payment companies, including Early Warning Services and the Clearing House, on whether to team up to issue a joint stablecoin. The Thursday report notes that those talks are in early stages and are subject to change, with their ultimate outcome hinging on forthcoming stablecoin legislation that could help establish frameworks for banks and non-banks to issue stablecoins. Earlier this week, the Senate voted to move forward with the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act. A full floor vote for the proposed legislation is expected to arrive in the coming weeks. If passed, the bill will effectively set the stage for stablecoin regulation by requiring such tokenized assets to be fully backed by U.S. dollars or similarly liquid assets, requiring annual audits for issuers with over $50 billion in market value, and adding language around foreign issuance. Earlier this week, White House crypto czar David Sacks said he expects the bill to be passed and that it will receive bipartisan support. Sacks added that the legislation could trigger “trillions of dollars” in demand for US Treasurys by unlocking stablecoin growth under clear rules. However, some high-ranking Democrats stressed the need to amend the bill to include a clause addressing President Donald Trump’s personal ties to crypto before giving the bill final approval. Critics have voiced concerns that the administration benefits from the legislation, given its ties to World Liberty Financial, a crypto firm backed by Trump and his sons that recently launched its own stablecoin, USD1. Growing Stablecoin Demand Amid Regulatory Shifts The demand for dollar-pegged digital assets has been on the rise, with nation states adopting and institutions wanting to integrate stablecoins. The total market cap of stablecoins has climbed to $245 billion from $205 billion at the beginning of the year, marking a sharp 20% rise. Tether USDT and Circle’s USDC currently dominate the stablecoin market. The improved regulatory environment under US President Donald Trump’s administration has seen fintechs and crypto firms pursue bank charters, further adding pressure to legacy banking systems. The joint stablecoin by U.S. banks seeks to boost transaction speeds and efficiency while fending off competition from crypto-centric firms.

Source: ZyCrypto