Global Banking Powerhouses Plan Issuing New Stablecoins Tied To G7 Currencies
A consortium of main banks, together with Bank of America, Citi, Deutsche Bank, Goldman Sachs, and UBS, introduced on Friday that they may collaborate to discover the event of stablecoins pegged to G7 currencies.
A New Era For Crypto In Mainstream Finance
The renewed curiosity in stablecoins comes within the wake of US President Donald Trump’s endorsement of the sector, which has reignited discussions about integrating blockchain technology into mainstream finance.
Currently, the stablecoin market is closely dominated by Tether (USDT), primarily based in El Salvador, which accounts for about $179 billion of the whole $310 billion in stablecoins circulating, in response to knowledge from CoinGecko.
The banks concerned on this new initiative, which additionally contains Santander, Barclays, BNP Paribas, MUFG, TD Bank Group, and others, have said that the purpose is to evaluate whether or not a collaborative trade providing might improve competitors and convey the advantages of digital belongings to the market, all whereas guaranteeing compliance.
Notably, France’s Societe Generale lately turned the primary main financial institution to problem a dollar-backed stablecoin by means of its digital asset subsidiary, though it has seen restricted adoption, with solely $30.6 million at the moment in circulation.
In addition to this consortium, a separate group of 9 European banks, together with outstanding names like ING and UniCredit, can also be within the strategy of launching a euro-denominated stablecoin.
Meanwhile, Citi has made strides within the stablecoin area by investing in BVNK, an organization centered on stablecoin infrastructure.
Demand For Stablecoin Solutions Grows
Although Citi has not disclosed the quantity of its funding, the co-founder of BVNK, Chris Harmse, informed throughout an interview with CNBC, that the corporate’s valuation has surpassed $750 million, as reported in its newest funding spherical.
Harmse remarked on the rising demand for stablecoin infrastructure, notably with the emergence of regulatory readability by means of the passage of the GENIUS Act within the US. This has prompted main US banks to strategically place themselves within the crypto ecosystem.
Citi’s CEO, Jane Fraser, has indicated that the financial institution is considering the issuance of its personal stablecoin whereas additionally exploring custodian services for digital belongings. However, Citi will not be alone in its pursuit of digital asset integration; JPMorgan Chase has already launched its personal stablecoin-like token, JPMD.
Banks are more and more investigating how blockchain expertise—initially developed to assist Bitcoin—can cut back transaction prices and improve processing speeds throughout varied monetary operations.
This exploration contains the idea of tokenization, which includes creating digital tokens that symbolize conventional belongings, resembling deposits. For occasion, Bank of New York Mellon is at the moment trying into tokenized deposits, whereas HSBC has already rolled out a tokenized deposit service.
Featured picture from DALL-E, chart from TradingView.com
