A consortium of major banks, including Bank of America, Citi, Deutsche Bank, Goldman Sachs and UBS, announced on Friday that they will collaborate to explore the development of stablecoins linked to G7 currencies.
A new era for cryptocurrencies in mainstream finance
The renewed interest in stablecoins comes in the wake of US President Donald Trump’s endorsement of the sector, reigniting discussions about integration. Blockchain technology In mainstream finance.
Currently, the stablecoin market is largely dominated by El Salvador-based Tether (USDT), which represents about $179 billion of the total $310 billion of stablecoins in circulation, according to data from CoinGecko.
Banks involved in this New initiativewhich also includes Santander, Barclays, BNP Paribas, MUFG, TD Bank Group and others, said the goal is to evaluate whether the collaborative industry offering can foster competition and bring the benefits of digital assets to the market, all while ensuring compliance.
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It is worth noting that the French bank Société Générale recently became the first major bank to issue a dollar-backed stablecoin through its company. Digital assets subsidiarythough it has seen limited adoption, with only $30.6 million currently in circulation.
In addition to this consortium, a separate group of nine European banks, including notable names such as ING and UniCredit, are also working on launching a euro-denominated stablecoin.
Meanwhile, Citi has made strides in the stablecoin space by investing in BVNK, a company focused on stablecoin infrastructure.
Increasing demand for stablecoin solutions
Although Citi did not reveal the size of its investment, BVNK co-founder Chris Harms said during a press conference: interview With CNBC, the company’s valuation exceeded $750 million, as reported in its latest funding round.
Harms pointed to the growing demand for stablecoin infrastructure, especially with the emergence of regulatory clarity through the passage of the GENIUS Act in the United States. This has prompted major US banks to strategically position themselves in the cryptocurrency ecosystem.
Citi CEO Jane Fraser has indicated that the bank is considering issuing its own stablecoin while also exploring Conservation services For digital assets. However, Citi is not alone in its pursuit of digital asset integration; JPMorgan Chase has already launched its own stablecoin-like token, JPMD.
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Banks are increasingly looking into how blockchain technology – originally developed to support Bitcoin – can reduce transaction costs and enhance processing speeds across various financial operations.
This exploration includes the concept of tokenization, which involves creating digital tokens that represent traditional assets, such as deposits. For example, Bank of New York Mellon is currently looking into tokenized deposits, while HSBC has already rolled out a tokenized deposit service.
Featured image of DALL-E, chart from TradingView.com
The post Global Banking Powerhouses Plan Issuing New Stablecoins Tied To G7 Currencies first appeared on Investorempires.com.
