While Circle’s (CRCL -4.00%) USDC (USDC -0.01%) and Tether’s USDT (USDT -0.03%) dominate today’s stablecoin market, the world’s biggest financial institutions are moving aggressively to challenge them. A coalition of major international banks – including Bank of America (BAC -1.96%), Citigroup (C -2.20%), Barclays (BCS -2.79%), BNP Paribas (OTCMKTS:BNPQY), Deutsche Bank (DB -3.04%), Goldman Sachs (GS -1.56%), UBS (UBS -3.61%), Santander (SAN -2.14%), MUFG (MUFG -2.49%), and TD Bank (TD -0.33%) – is now jointly exploring a 1:1 reserve-backed digital money that would operate on public blockchains and be tied to G7 currencies.
This initiative goes beyond earlier reports of U.S. banks discussing a joint stablecoin. It signals a coordinated, industry-wide push to create a compliant, bank-issued alternative that could dramatically reshape the stablecoin and cryptocurrency landscape. Many banks are also evaluating their own stablecoins or deposit tokens, broadening the competitive threat to existing crypto-native issuers.
Payment processors are watching closely. If stablecoins divert transaction volume away from their networks, they risk losing significant fee revenue, which is why card networks and processors are actively exploring ways to remain essential as blockchain-based payments evolve.
Banks and financial institutions
Some of the largest banks have discussed plans to issue stablecoins or tokenized deposit systems.
JPMorgan Chase
In November 2025, JPMorgan Chase launched a U.S. dollar deposit token, similar to a stablecoin but technically not one, called JPM Coin and referred to as JPMD. The token is available to its institutional clients to facilitate transactions on the Base blockchain. JPMorgan states that the token will enable 24/7 settlement and can be utilized for interest payments. JPMorgan claims that JPMD can be considered as bank deposits on balance sheets, which could be beneficial for clients.
Citigroup
Citigroup currently offers a token service for institutional clients called Citi Token Services. Deposits are translated into digital tokens on blockchain, which enable instant cross-border transactions at any time. In July, Citigroup CEO Jane Fraser said she hopes to make the company’s digital-asset capabilities “consumer- and client-facing.”
Fraser also said the bank is exploring a “Citi stablecoin.”
In September, Citi announced that it would integrate Citi Token Services with its 24/7 USD Clearing solution to enable multibank payments around the clock for institutional clients in the U.K. and U.S.
Bank of America
Bank of America is actively exploring the launch of a stablecoin but is waiting for clearer regulation and high customer demand, according to numerous statements from CEO Brian Moynihan in 2025.
Card networks and payment processors
Card networks, like Visa (V -0.10%) and Mastercard (MA -0.47%), have announced products and services that would maintain their positions as key parts of financial plumbing, linking partner-led stablecoin payments with fiat settlement.
Visa
Visa announced in April 2025 that it would accept stablecoins through partners like Bridge, a stablecoin platform owned by Stripe, letting customers link Visa cards to stablecoin wallets. When used at a Visa-accepting merchant, stablecoins are converted to fiat at checkout, so merchants are paid in the local currency. Visa acts as a bridge between stablecoins and fiat currency, not as a stablecoin-native network, and merchants don’t receive crypto through this system.
In November, Visa Direct was announced, which allows businesses to provide payouts in their own fiat currency while recipients can opt to receive funds in a USD-backed stablecoin.
Mastercard
Mastercard enables stablecoins in its network through integrations with partners, including Paxos, Circle, Fiserv, and PayPal. Mastercard provides wallet-linked cards through crypto platforms like MetaMask, Kraken, and Binance, and is eyeing merchant settlement in stablecoins. It seeks to bridge stablecoin usage and the traditional financial system.
In November, Mastercard announced a partnership with Thunes to allow payouts directly into recipients’ stablecoin wallets as part of its Mastercard Move program.
PayPal
PayPal (PYPL -3.29%) has launched PayPal USD (PYUSD -0.03%), a dollar-backed stablecoin available to U.S. PayPal users. PYUSD is issued by Paxos on Ethereum and Solana and can be bought, sold, and transferred through PayPal. It can be sent domestically with no fees or withdrawn to external wallets, with a network fee. PYUSD can be used at checkout, where PayPal converts it to fiat.
Stablecoins after the Genius Act
Banks waiting on a clearer regulatory landscape before formalizing their plans for stablecoins might have just had their wishes granted. On July 17, 2025, Congress passed the so-called GENIUS Act to regulate stablecoins, bringing some long-sought legitimacy to the crypto industry.
The bill includes a requirement that issuers of dollar-backed stablecoins maintain dollar-for-dollar reserves in permitted products, including insured deposits at banks, short-term Treasury bills, repurchase agreements (repos), and other government-issued assets. The bill also requires regulations to be promulgated for stablecoin issuers, but exempts issuers from capital standards that traditional banks must meet. Stablecoin issuers will also be required to maintain redemption procedures and report on reserves, which would be audited by accounting firms.
Notably, the GENIUS Act allows both banks and nonbanks to issue stablecoins. The latter would require approval from the Treasury Secretary and the chairs of the Federal Reserve and the Federal Deposit Insurance Corporation. But the legislation opens the door to companies issuing their own stablecoins, which Walmart (WMT +6.38%) and Amazon (AMZN -2.49%) are reportedly exploring.
Proponents of the GENIUS Act argue that it will help bridge the gap between traditional and decentralized finance, enhance the payments system, and strengthen the dominance of the dollar. Critics warn that the legislation will give the industry a veneer of legitimacy and oversight without requiring tough enough regulation to protect consumers. Detractors also argue that the bill does not sufficiently prevent stablecoins from being used for illicit purposes.
Other stablecoin research
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