A 21-bank consortium led by heavyweights including Bank of America, Citi, Goldman Sachs and UBS is preparing to create a company that would issue stablecoins for payments and digital asset transactions.
- 21 banks are backing the push
- Dollar stablecoin first, euro close behind
- Built for payments, not just trading
- Tether and Circle may face real competition
If the group follows through, this could become one of the most serious TradFi incursions into crypto since banks first started pretending blockchain was just a “pilot program” and not a direct threat to their tollbooth business model.
According to the plan, the yet-to-be-named company would issue a U.S. dollar-denominated stablecoin first, with a target launch in the first half of 2027. A euro-denominated token is also among the project’s top priorities, and the broader aim is to build a global digital payments network that could eventually expand to other Group of Seven currencies.
A stablecoin is a crypto token designed to hold a steady value, usually by tracking a fiat currency such as the U.S. dollar or euro. People use them because they move like crypto but behave more like cash. They are handy for trading, sending money and settling transactions without the wild swings that come with bitcoin, ether and the rest of the circus.
The banking angle matters because stablecoins are no longer just a crypto convenience. They are becoming payment rails. That means the fight is shifting from who can issue a token to who gets to control a layer of financial infrastructure that could move money faster, cheaper and around the clock.
The consortium is described as an expansion of a project first announced in October 2025, when 10 banks said they were exploring a blockchain-based payment asset backed one-for-one by reserves and designed to operate on public blockchains. The newer group now spans institutions across North America, Europe, East Asia, the Middle East and Africa, with additional participants including Wells Fargo, Deutsche Bank, Santander, Fidelity Investments, MUFG Bank and Standard Bank.
That matters for two reasons. First, this is not just a U.S. banking club trying to tack “crypto” onto a slide deck. Second, the use of public blockchains suggests these firms understand where real liquidity lives. Closed systems are fine for internal demos and terrible for actual network effects.
Still, public blockchain use does not automatically mean decentralization. A stablecoin can live on an open network and still be tightly controlled by its issuer. Open rails are not the same thing as open governance, and that is exactly where the marketing department tends to get a little too creative.
The timing is no accident. Stablecoin supply has ballooned enough to make banks pay attention, and the market is still heavily concentrated. The figures provided put total stablecoin market capitalization at roughly $200 billion at the beginning of last year and about $303 billion now. Tether’s USDT accounts for about 60% of the market, while Circle’s USDC holds more than 20%.
That is a lot of territory for one bank consortium to challenge. Stablecoin winners are not chosen by branding contests or glossy compliance decks. Liquidity, integrations, redemption reliability and actual usage decide the winners. A token can be fully reserved and still go nowhere if nobody uses it.
That is the central bet here: banks think they can combine mainstream trust, compliance and distribution with blockchain-based settlement. In theory, that could make stablecoins easier for institutions to use, especially for cross-border payments and digital asset settlement. In practice, banks have a habit of turning simple tools into committee-shaped sludge.
The group says the stablecoins are intended to comply with the U.S. GENIUS Act and the European Union’s Markets in Crypto-Assets regime, better known as MiCA. The GENIUS Act, now an active U.S. framework for payment stablecoins, gives issuers clearer rules around reserves, redemption and who is allowed to issue. MiCA does something similar in Europe by setting EU-wide rules instead of leaving every country to improvise its own mess.
That regulatory clarity is part of why major banks are moving now. They do not like ambiguity, and for once the law is giving them a lane instead of a shrug. The upside is obvious: more legitimacy, more oversight and a cleaner path to mainstream payment use. The downside is just as obvious: more centralization, more gatekeeping and more surveillance dressed up as innovation.
If this effort works, it could pressure Tether and Circle over the long run, especially in institutional payments and cross-border settlement. Circle shares fell more than 4% during Tuesday’s trading session after the news, while Tether is not publicly traded. That does not mean the incumbents are suddenly in danger of collapse, but it does show investors are taking the challenge seriously.
At the same time, bank-backed stablecoins will still have to prove they can move beyond permissioned experimentation. A product that is compliant but clunky will not beat a product that is widely integrated and easy to use. Banks can bring credibility and balance-sheet muscle; they cannot wish away network effects.
There is also a philosophical split worth watching. Bitcoin exists to remove trusted intermediaries from money. Stablecoins, especially bank-issued ones, can improve payment rails without changing the fact that somebody still holds the levers. That is a feature if you want smooth settlement and legal certainty. It is a bug if you believe financial privacy and censorship resistance should not be optional extras.
For that reason, the bank consortium is both a validation of crypto’s usefulness and a reminder of its tradeoffs. Traditional finance is not ignoring stablecoins anymore. It is trying to absorb them, regulate them and, if possible, own the rails outright. That may help adoption. It may also recreate old finance with prettier branding.
The next real checkpoints are straightforward: whether the company is formally established in the second half of 2026, whether the launch timeline holds, and whether the group can deliver something people actually want to hold and move. A name, a reserve structure and a working product will matter far more than the usual corporate fanfare.
Key Questions and Takeaways
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Why are major banks moving into stablecoins?
Because stablecoins are becoming core payment infrastructure, and banks do not want crypto-native issuers owning that layer. They also now have clearer regulatory lanes in the U.S. and Europe, including the GENIUS Act Regulations: Notice of Proposed Rulemaking and broader guidance around payment stablecoins. -
What is the first planned token?
A U.S. dollar-denominated stablecoin, with a target launch in the first half of 2027. -
Is a euro stablecoin part of the plan?
Yes. A euro-denominated token is among the project’s top priorities, with possible expansion into other G7 currencies later. -
Who is being challenged by this move?
Mainly Tether and Circle, which still dominate the stablecoin market. A bank-backed entrant could pressure both on compliance, institutional adoption and payment use cases. -
What is the biggest risk for the banks?
They could overcomplicate the product, delay adoption and end up with a fully compliant token that is less useful than the market leaders. Regulation helps, but liquidity and usability still decide the fight. -
Does a public blockchain mean the stablecoin is decentralized?
No. A token can run on a public chain and still be centrally controlled by its issuer. Open infrastructure is not the same thing as open governance.
If the banks get this right, stablecoins could move deeper into mainstream finance and cross-border payments. If they get it wrong, the market will do what it always does: ignore expensive permissioned junk and reward the rails that actually work.
Further reading
A few useful primers and market context pieces on where stablecoins are headed next.
- Reuters: major banks explore stablecoins pegged to G7 currencies
- CoinGecko stablecoin categories
- The GENIUS Act: a comprehensive guide to U.S. stablecoin regulation
- Yahoo Finance: twelve major banks are building a stablecoin on public blockchains
- Tether and Circle mint $1.75B in stablecoins to counter market stress
- Tether and Circle under siege: stablecoin dominance crumbles amid scandals and rivals
- Stablecoins evolve into core payments infrastructure as Tether and Circle clash in DeFi
