Bank of America, Goldman Sachs, Deutsche Bank, Citi and BNP Paribas have launched an initiative to explore the launch of stablecoins backed by reserves in dollars, euros and yen.
Leading banks around the world are preparing stablecoins pegged to G7 currencies
BNP Paribas, Bank of America, Goldman Sachs, Deutsche Bank and Citi announced on Friday a joint project to explore the launch of stablecoins backed by 1:1 reserves and pegged to the major currencies of the Group of Seven (G7) countries — the US dollar, euro, yen, pound, Canadian dollar, franc and Italian lira.
According to the banks, the goal of the initiative is to create a “new, industry-wide solution for digital money” that can combine the benefits of blockchain with the financial stability of traditional assets.
“We are seeking to understand whether this form of digital money can increase competition in the market while ensuring full compliance with regulatory requirements and risk management standards,” the joint statement said.
Context: Competition with Tether and the GENIUS Act
While the banks did not specify a launch date, the project is likely to compete with already dominant players in the market, including Tether (USDT), which has a market capitalization of more than $178 billion.
The initiative coincided with the entry into force of the GENIUS Act, a new law regulating payment stablecoins that President Donald Trump signed into law in July. The law creates uniform standards for stablecoin issuers in the United States, but will not be fully operational until 15 months later, after the rules are approved by the Treasury Department and the Federal Reserve.
Regulatory Debate
Despite the generally positive reaction from the crypto community, banks are demanding clarification of the law, fearing that interest-bearing stablecoins could undermine financial stability and encourage customers to transfer deposits to digital assets.
Tushar Jain, co-founder of Multicoin Capital, said the GENIUS Act could “push” deposits out of banks and into more profitable stablecoins, while Dante Disparte of Circle stressed that the wording of the law would “prevent banks or tech corporations from dominating” the sector.
Shaping a New Financial Landscape
Currently, the largest stablecoins include:
- USDT (Tether)
- USDC (Circle)
- DAI (MakerDAO)
- USDe (Ethena)
- PYUSD (PayPal)
- USD1 is a token from World Liberty Financial, a crypto company backed by the Trump family.
The initiative of leading banks could be a turning point for the market – for the first time, traditional financial institutions are trying to create a universal digital money system that will operate on public blockchains and with full regulatory control.
