Major banks are warming to the idea of issuing their own stablecoins as the fast-growing market raises concerns that crypto firms and other nonbank companies could encroach on traditional banking businesses.
Banks had previously pushed back against stablecoins, with some executives questioning whether there was enough demand for bank-issued digital dollars. The industry also spent months lobbying against efforts by crypto companies to offer stablecoins that could compete with traditional bank deposits.
That stance now appears to be changing.
JPMorgan's stablecoin plans
JPMorgan Chase recently evaluated whether it could launch its own stablecoin, according to people familiar with the matter cited by The Wall Street Journal. The discussions remain preliminary, and the bank has not begun developing an active product.
“While we have no plans to issue a stablecoin,” a JPMorgan spokeswoman told the WSJ, the bank could evaluate its options depending on customer demand and the evolving regulatory environment.
JPMorgan already operates JPM Coin, a tokenized deposit system designed to facilitate payments using blockchain technology. Unlike a stablecoin, a tokenized deposit represents traditional bank money in digital form.
Meanwhile, a group of more than a dozen financial institutions, including Bank of America, Wells Fargo and Santander, is moving forward with plans for a global stablecoin venture, according to the WSJ. The proposed project would initially focus on the U.S. dollar before potentially expanding to the euro and other Group of Seven currencies.
The banks are also considering different commercial use cases depending on the region.
Smaller financial institutions are exploring similar projects. On Tuesday, a consortium of state bankers associations announced plans for a bank-owned blockchain platform. About 39 state bankers associations representing roughly 3,000 banks are currently involved in the initiative.
The top stablecoins already represent a market worth hundreds of billions of dollars, highlighting the scale of the opportunity banks may be reluctant to leave to crypto companies and other competitors.
For banks, issuing or supporting stablecoins could therefore become less about embracing crypto and more about defending their role in the future of payments.
U.Today Editorial Team
Dan Burgin
