JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are in talks about issuing a joint stablecoin, according to people familiar with the matter who spoke to The Wall Street Journal. The conversations extend to shared banking ventures including Early Warning Services, Zelle’s parent company, and The Clearing House. Talks are still preliminary and may not end as expected. Any final decision is dependent on upcoming cryptocurrency legislation.

Crypto Competition Worries Traditional Banks

Traditional banks worry that digital currencies could erode their control over customer deposits and payment processing. Tech companies and cryptocurrency platforms have gained ground in areas where banks previously dominated. Regulatory uncertainty over the past two years has allowed crypto firms to advance while banks remained cautious about entering the digital asset market. People can now access the best crypto staking platform, which has pulled in millions of users, letting them stake thousands of different cryptocurrencies while maintaining control of their private keys. They scan hundreds of validators to find the best rates and let users pick based on returns, lock-up periods, and fees, creating a comprehensive ecosystem that banks now view as competitive. The optimistic regulatory environment weighs on banks because crypto companies are now seeking bank charters.

Senate Moves on Stablecoin Rules

On March 13, 2025, the US Senate Banking Committee passed the Guiding and Establishing National Innovation for US Stablecoins Act of 2025 or “GENIUS Act,” out of committee by a vote of 18-6. The bill would set up the first federal framework for payment stablecoins in America. But the legislation hit a wall in May. The legislation failed to advance, with 49 senators voting against and 48 in favor, when Democrats pulled support over ethics concerns. Senate Democrats, including Massachusetts’ Senator Elizabeth Warren and Virginia’s Mark Warner, are concerned about possible conflicts of interest because of the US President’s crypto involvement, particularly in light of President Donald Trump’s family’s involvement in the crypto industry. Treasury Secretary Scott Bessent later criticized lawmakers for missing what he called a once-in-a-generation opportunity to expand dollar dominance.

International Race Heats Up

Other countries are moving faster. For instance, the European Union has adopted extensive crypto regulations, like its Markets in Crypto-Assets Regulation (MiCA). The Hong Kong branch of Standard Chartered established a joint venture with Animoca Brands and HKT in order to apply for a license from the Hong Kong Monetary Authority to issue a stablecoin backed by Hong Kong dollars. MUFG, SMBC, and Mizuho, the three biggest banks in Japan, have joined a pilot program called “Project Pax” to use stablecoins for international transactions.  The global stablecoin market reached a record $187.5 billion in market capitalization during 2024, with stablecoin transfer volume hitting $27.6 trillion last year, surpassing the combined volume of Visa and Mastercard transactions in 2024.

Banks See Payment Opportunity

Banks see potential in them to improve their operations, with international remittances currently taking days through the traditional system. Stablecoins, designed to maintain a one-to-one value with traditional currencies like the U.S. dollar, are typically backed by reserves of cash or highly liquid assets such as Treasury securities. Stablecoins are digital assets with values based on another asset like a commodity or traditional currency, and can settle transactions in seconds. Current market leaders show the scope of the opportunity. Tether (USDT) maintains a $144 billion market cap, while second-placed USDC, issued by Circle, is nearing $60 billion, which is an increase of $25 billion since the election. Standard Chartered analysts led by Geoff Kendrick forecast that total stablecoin supply could rise from $230 billion today to $2 trillion by year-end 2028.

Consortium Model Under Discussion

An idea in the consortium’s talks is a stablecoin model that banks outside the group can access. Regional institutions have also made the same efforts, though such efforts face greater challenges due to resource constraints and the complexity of navigating regulatory compliance. The Clearing House and Early Warning Services would likely play central roles in any joint project. EWS is jointly owned by seven major US banks, including JPMorgan Chase, Bank of America, and Wells Fargo. TCH, meanwhile, is owned by two dozen of the world’s largest banks.

Fee Competition Drives Interest

Current stablecoin services cost more than traditional banking. Today, business clients may be charged fees ranging from 0.1% to 0.2% for stablecoin conversion services, such as trading USDC for USD on sites like Coinbase. Compared to the FX spreads that banks normally offer for major currency pairs, which typically range from 0.01% to 0.1% for corporate clients, these fees are substantially higher. Banks think they can beat those prices while offering familiar, regulated services to their existing customers. Tether brought in $13 billion in profit in 2024, or roughly double that of BlackRock, the world’s largest asset manager, showing the revenue potential in the stablecoin space. As of December 2024, Tether holds $157.6 billion in assets, including Gold, Bitcoin, and US Treasury bills.