Major United States banks are venturing into cryptocurrency to create a stablecoin pegged to the U.S. dollar, to rival digital asset platforms. This move, reported by The Wall Street Journal, signals a shift as traditional banks aim to modernize payments. The initiative reflects banks’ urgency to stay competitive in a rapidly evolving financial landscape. Early talks suggest a model allowing other banks to use the stablecoin, expanding its reach.
Why Banks Are Making This Move
The decision is a fallout of a growing competition from crypto firms like Circle and Coinbase, which dominate stablecoin markets. Digital asset platforms are gaining market share, prompting banks to integrate blockchain technology into their systems. JPMorgan’s JPM Coin and Wells Fargo’s Digital Cash show early bank efforts in digital currencies.
Bank of America’s CEO Brian Moynihan emphasized readiness to issue a dollar-backed stablecoin, pending regulatory approval. The banks aim to leverage their existing networks, like Zelle, to modernize payments and counter crypto’s rise.
Who’s Involved in the Plan?
According to The Wall Street Journal, JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo are leading the stablecoin discussions. Early Warning Services, which operates Zelle, is a key player co-owned by these banks and others. The Clearing House, a real-time payment network, is also involved, facilitating interbank transactions.
This consortium includes seven major U.S. banks, such as PNC Bank, Truist, and U.S. Bank. The talks are in early stages, with potential for other banks to join the initiative.
Stablecoins, like the one proposed, aim to maintain a steady value, typically pegged to the U.S. dollar. It offers banks a controlled, predictable digital currency for payments, contrasting with Bitcoin’s speculative nature.
However, Bitcoin, a decentralized virtual currency, has contrasted with the stablecoin with frequent experiences of significant price fluctuations. In the past few days, the apex coin has seen notable volatility, swinging from a periodic dip of 103,000 to an all-time high, with its value above $110,000 per coin on Bitcoin Pizza Day.
Meanwhile, over the past 24 hours, Bitcoin’s price dropped from $111,000 to $110,000, a 0.58% decrease. CoinMarketCap reports a trading volume of $59.32 billion, with a circulating supply of 19,86 BTC and a total supply of 19,86 BTC, giving a market cap of about $2.19 trillion.
