US Banks Weigh Direct Stablecoin Issuance to Defend Against Deposit Outflows
Forecast Trend Report by Period
US banks are moving more quickly into the stablecoin market as they brace for nonbank companies to expand in payments and financial services, threatening traditional deposit and payments businesses.
The Wall Street Journal reported on August 26 that JPMorgan Chase has recently discussed internally whether to launch its own stablecoin. The bank has not entered a concrete product-development stage. JPMorgan does not currently plan to issue one, but is keeping its options open depending on customer demand and regulatory changes.
Large banks are also discussing a joint issuance model. More than 12 financial firms, including Bank of America, Wells Fargo and Santander, are considering a plan to pursue a global stablecoin business together. One option under discussion is to introduce a dollar-based coin in corporate banking first, then expand into major currencies including the euro.
Small and regional banks are pursuing a separate response. The Bankchain Alliance, which includes state bankers associations from 39 US states, recently unveiled plans for a blockchain platform to be operated directly by banks. The platform, involving about 3,000 banks, is targeting a launch in the first half of 2027. It would support cash management and supply-chain finance, as well as tokenized deposits and stablecoin functions.
The shift in banks' stance has been driven in part by nonbank companies entering the market. Stablecoins were previously led by crypto firms such as Tether and Circle, but traditional finance and technology companies including Visa, BlackRock, Google and DoorDash are now reviewing or pursuing related businesses. Anchorage Digital is working on more than 12 stablecoin projects, some of which are led by banks or banking consortia, the report said.
Banks have so far preferred tokenized deposits to stablecoins. Tokenized deposits convert traditional bank deposits into blockchain-based digital tokens, making them relatively easier to fit into existing credit, accounting and regulatory frameworks. They also keep deposits from leaving the banking system, which banks view as an advantage.
Stablecoins, by contrast, can be used across public blockchains including Ethereum and Solana, giving them broader utility. Banks are increasingly concerned that if nonbank companies build out payment and remittance services on that foundation, traditional lenders could see pressure on core revenue streams and customer relationships.
Banks are especially wary that deposit outflows could accelerate if stablecoin holders receive interest or other rewards. They have clashed with the crypto industry in debate over the CLARITY Act, a US crypto market structure bill, arguing that such payments should be restricted.
Crypto firms' push into banking is also intensifying competition. World Liberty Financial, which is linked to the family of US President Donald Trump, recently received preliminary conditional approval from the Office of the Comptroller of the Currency to establish a bank. If it wins final approval, it would be able to issue, redeem and custody USD1, a dollar-pegged stablecoin valued at about $4 billion, through World Liberty Trust.
Jonathan Gould, the comptroller of the currency, said at a recent blockchain symposium in Jackson Hole, Wyoming, that business plans submitted to the OCC now commonly include payment stablecoins.
