Major U.S. banks are reportedly discussing plans to jointly issue stablecoins. The Wall Street Journal (WSJ) reported on the 22nd (local time) that large banks such as JP Morgan, Bank of America, Citigroup, and Wells Fargo are participating in this discussion along with Early Warning Services, which operates the peer-to-peer payment platform Zelle, and the real-time payment network Clearing House.
According to multiple sources, the discussion is still at an early conceptual stage, and the future push is expected to depend on the direction of stablecoin-related legislation and whether there is sufficient market demand.
The background behind the large banks considering joint issuance stems from the awareness that the spread of stablecoins could threaten the deposits base and payment networks of traditional banks. Especially concerning is the possibility that if large technology companies or retailers issue their own stablecoins, the order of the financial market could change.
Stablecoins are virtual currencies linked to specific assets (mainly the U.S. dollar) to minimize volatility. They are used for various purposes such as purchasing other cryptocurrencies on exchanges, asset storage, and payments, similar to digital dollars. Generally, U.S. Government Bonds are used as collateral to maintain the value at a certain level.
WSJ interpreted the movements of large banks as a signal that the gap between mainstream finance on Wall Street and the virtual asset ecosystem is narrowing.
Currently, a stablecoin regulation bill known as the 'Geniuses Act' is ahead of a vote in the U.S. Senate. This bill contains provisions that limit the issuance of stablecoins by non-financial publicly listed companies, but it is assessed as not reaching the level of a total ban that banks had requested.
Meanwhile, Donald Trump Jr., the eldest son of former President Donald Trump, and his younger brother Eric Trump launched the cryptocurrency platform 'World Liberty Financial' (WLF) in September of last year and subsequently released a stablecoin named 'USD1' at the end of March this year.