- JPMorgan is reportedly considering a stablecoin alongside its JPM Coin deposit token.
- Bank of America, Wells Fargo and Santander are advancing a joint global stablecoin venture.
- Major banks are reconsidering stablecoins as non-bank companies expand into the market.
Major US banks are reconsidering their approach to stablecoins as payment, technology and asset-management companies expand into the market.
JPMorgan Weighs a Stablecoin as Major Banks Make Their Move
JPMorgan Chase is considering whether to issue its own stablecoin, according to a Wall Street Journal report published August 26. The bank said it has no current plans to launch one, but a spokesperson noted it would consider its options in light of customer demand and the evolving regulatory environment.
Sponsored
JPMorgan already operates JPM Coin, a tokenized deposit product built on its Kinexys blockchain infrastructure.
Separately, more than a dozen financial institutions, including Bank of America, Wells Fargo and Santander, are reportedly advancing a joint stablecoin venture aimed at corporate clients. The project is expected to launch with a dollar-denominated token before expanding to the euro and other G7 currencies, according to sources cited by the Journal.
The developments mark a shift from the position banks have historically taken on stablecoins. Banks have generally favored tokenized deposits, which remain tied to insured bank accounts, rather than stablecoins.
Why Are US Banks Reconsidering Stablecoins Now?
Banks have historically favored tokenized deposits, which remain tied to insured bank accounts, over stablecoins. That position has shifted as non-bank companies, including Visa, BlackRock, Google and DoorDash, move into a stablecoin market long dominated by Tether and Circle.
The potential impact on banks has also become clearer in recent months.
S&P Global Ratings warned in June that significant growth in stablecoin usage could have meaningful implications for US banks. It said the direct threat to US bank deposits remained limited because stablecoins were primarily used outside the US and as settlement assets, but noted that the risk would increase if stablecoins became widely used for payments in the US.
By July, around two-thirds of US bank executives surveyed by S&P Global Market Intelligence said their banks could lose deposits to stablecoins if consumers were allowed to earn rewards on them.
Research from Oliver Wyman on Citi’s scenarios through 2030 also found that stablecoin growth could increase banks’ funding costs and reduce revenue from cross-border payments, while creating new revenue opportunities from stablecoin redemptions and other services.
That tension is now visible in the banks’ actions. Stablecoins could compete with parts of the existing banking business, while also creating a new market in which banks could participate.
The shift is also appearing at the infrastructure level.
On August 26, Dailycoin reported on the BankChain Alliance, formed by 39 US state banking associations. The initiative aims to build bank-owned infrastructure for tokenized deposits, stablecoins and programmable payments, with a target launch in 2027. The participating associations represent hundreds of financial institutions and are currently selecting a technology partner.
The move follows other bank-led blockchain projects, including an on-chain money initiative involving JPMorgan Chase, Bank of America, Citi, BNY and Wells Fargo.
What the Stablecoin Shift Could Mean for Banks
JPMorgan Global Research has projected that the stablecoin market could reach $500 billion to $750 billion in the coming years. JPMorgan researchers have also described stablecoins as a potential settlement mechanism for tokenized assets.
That may help explain why banks that previously preferred tokenized deposits are now considering stablecoins: the market is growing, non-bank companies are entering it, executives are increasingly concerned about potential deposit losses, and banks are examining stablecoins as part of the infrastructure for tokenized assets.
Dive into DailyCoin’s hottest crypto scoops today:
Ripple CEO: $16 Trillion In Motion Shows Visa-Scale Reach
Could Ether Hit $5,000? On-Chain Signs Carve a Clear Path