
Big Banks Explore Venturing Into Crypto World Together With Joint Stablecoin — WSJ
By Gina Heeb and Justin BaerThe nation's biggest banks are exploring whether to team up to issue a joint stablecoin, a step intended to fend off escalating competition from the cryptocurrency industry.The conversations have so far involved companies co-owned by JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and other large commercial banks, according to people familiar with the matter. Those include Early Warning Services, the operator of the peer-to-peer payment system Zelle, and the Clearing House, the real-time payment network.The bank consortium discussions are in early, conceptual stages and could change. Any final decision would depend on the fate of legislative actions around stablecoins and other factors, such as whether the banks find there would be enough demand for them.Banks have been bracing for the possibility that stablecoins could become widely adopted under President Trump and siphon away the deposits and transactions they handle, particularly if big tech companies or retailers get in on the action. The banking industry is in catch-up mode in the crypto space after a regulatory crackdown two years ago.Stablecoins function as digital dollars in crypto markets, and are currently used to store cash or purchase other tokens. They are supposed to maintain a one-to-one exchange ratio with dollars or other government currencies, and are backed by reserves of cash or cash-like assets such as Treasurys.Banks see an opportunity for stablecoins to speed up more routine transactions, such as cross-border payments that can take days in the traditional payments system. There's still some skepticism about the security of stablecoins and the regulatory implications of getting involved with digital assets, some of the people said.The possibility of Wall Street's traditional powers teaming up to issue their own stablecoin marks the latest sign that mainstream and crypto finance are inching closer together. And given their utility as an efficient way to move money, the stablecoin market has long seemed like a logical nexus between those two worlds.Last month, The Wall Street Journal reported that several crypto firms were planning to apply to regulators for banking charters or licenses , encouraged by a bill that would establish a regulatory framework for banks and nonbanks to issue stablecoins.The Senate this week cleared a procedural hurdle on the bill, called the GENIUS Act. The latest version of the bill included restrictions on nonfinancial public companies issuing stablecoins, according to a Thursday memo from the law firm Paul Hastings. But it didn't completely bar them from it, as bank lobbyists had sought.In March, the Trump family's World Liberty Financial said it would launch a stablecoin. Trump has also launched a meme coin, and was set to host its biggest holders to a gala dinner Thursday.One bank consortium possibility that has been discussed would be a model that lets other banks use the stablecoin, in addition to the co-owners of the Clearing House and Early Warning Services, some of the people said.Some regional and community banks have also considered whether to pursue a separate stablecoin consortium, according to people familiar with the matter. Such a venture would be much more difficult for smaller banks.Write to Gina Heeb at [email protected] and Justin Baer at [email protected]