Ten of the world’s largest banks, including Bank of America, Goldman Sachs, Deutsche Bank, UBS, and Citi, are exploring the creation of a joint stablecoin pegged to G7 currencies. The initiative, announced Friday, reflects a growing push by traditional finance to test blockchain-based settlement and payments infrastructure. The group also includes MUFG, Barclays, TD Bank, Santander, and BNP Paribas. In a joint statement, the banks said the project would examine whether issuing blockchain-based assets backed 1:1 by real‑world currencies could deliver efficiency benefits while remaining compliant with existing regulation.
“The objective of the initiative is to explore whether a new industry‑wide offering could bring the benefits of digital assets and enhance competition across the market, while ensuring full compliance with regulatory requirements and best practice risk management,” the banks said.
Investor Takeaway
Regulators Voice Caution as Banks Reenter Crypto
The exploration comes as stablecoins reemerge as a focal point in global finance, boosted by rising crypto prices and political support in the United States. President Donald Trump’s public backing for digital assets has helped renew institutional appetite for blockchain initiatives, reversing the sector’s post‑2022 slowdown.
Still, regulators remain wary. Bank of England Governor Andrew Bailey warned U.K. banks in June against issuing private stablecoins, citing risks to monetary stability. European Central Bank President Christine Lagarde has also cautioned that privately issued tokens could interfere with monetary policy and fragment payment systems.
Stablecoins have so far been used primarily to transfer funds within crypto markets. According to Boston Consulting Group estimates, nearly 90 % of stablecoin activity relates to crypto trading, with only about 6 % used for real‑world payments. The market remains concentrated in the hands of crypto‑native players — notably Tether, which accounts for about $179 billion of the roughly $310 billion stablecoins in circulation, data from CoinGecko show.
Banks Seek Regulated Alternative to Tether and Circle
The banks said they are engaging with regulators in multiple jurisdictions as part of their assessment. If successful, the effort could create a network of regulated, fiat‑backed tokens issued on public blockchains, each pegged to a G7 currency. The tokens would be designed for settlement and payments between financial institutions, and potentially, clients.
Traditional lenders have become increasingly vocal about the need for regulated infrastructure in the digital asset sector. Societe Generale earlier this year became the first major bank to issue a U.S. dollar‑backed stablecoin through its digital asset unit, though its token has seen limited uptake, with just $30 million in circulation.
In Europe, a separate consortium of nine banks — including ING and UniCredit — said in August it would launch a euro‑denominated stablecoin through a dedicated company. The two initiatives suggest a coordinated effort by traditional finance to preempt market share from crypto firms as the regulatory landscape for tokenized money becomes clearer.
Investor Takeaway
Tokenization vs. Stablecoins
While the stablecoin exploration has drawn attention, some bank executives argue that tokenized deposits — digital representations of existing bank money — may prove more practical. Citi CEO Jane Fraser said in July that tokenized deposits are “probably more important than a stablecoin” for the financial sector’s digital future, citing lower regulatory friction and compatibility with existing systems.
Many tokenization pilots remain at the proof‑of‑concept stage, and progress has been slower than expected. But the recent wave of banking consortia suggests a renewed willingness among global lenders to experiment with blockchain‑based settlement mechanisms under a unified standard.
The initiative by Bank of America, Goldman Sachs, Deutsche Bank, and others marks the broadest coalition yet of major financial institutions publicly committing to explore stablecoin issuance. Whether the project evolves into a live product will depend on regulatory approval and on whether the banks can agree on governance, reserve management, and network architecture.