US big banks hold early talks on joint crypto stablecoin: WSJ

Major US Banks Explore Joint Stablecoin Initiative

Amidst growing interest in stablecoins and the ongoing debate surrounding their regulation, a consortium of major US banks is reportedly exploring a joint initiative to launch their own stablecoin. The Wall Street Journal, citing anonymous sources, reported on May 22nd that companies affiliated with JPMorgan, Bank of America, Citigroup, and Wells Fargo are in discussions. Early Warning Services (parent company of Zelle) and The Clearing House are also reportedly involved. These discussions remain in preliminary stages, with the ultimate decision contingent upon regulatory developments and market demand. While JPMorgan declined to comment, other banks haven’t yet responded to requests.

This development comes on the heels of Senate action on the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. On May 20th, the Senate voted 66-32 to advance the bill, which aims to establish a regulatory framework for stablecoin collateralization and AML compliance. The bill now proceeds to the Senate floor for debate. White House crypto czar David Sacks predicted bipartisan passage. However, prominent Democrats plan amendments to prevent President Trump and other US officials from profiting from stablecoins, citing concerns about potential conflicts of interest related to Trump’s World Liberty Financial (WLFI) and its USD1 stablecoin.

The demand for stablecoins is clearly rising. Total market capitalization has increased 20% this year, reaching $245 billion. Yield-bearing stablecoins now account for approximately 4.5% of the market, representing $11 billion in circulation. This growth has prompted some, like NYU professor Austin Campbell, to suggest the banking lobby is “panicking” due to the potential disruption stablecoins pose to traditional banking. This concern is further underscored by reports of Meta exploring stablecoin integration into its platforms. The potential collaboration between major US banks signals a significant shift, highlighting the growing recognition of stablecoins’ importance within the financial landscape. The outcome of this initiative and the GENIUS Act will significantly shape the future of stablecoins in the US.