A consortium of more than 12 major global banks — including Bank of America, Wells Fargo, Santander, Barclays, BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, MUFG, TD Bank, and UBS — is now moving to compete directly with the $308 billion stablecoin market by issuing their own assets on public blockchains. This pivot marks a departure from the sector’s previous strategy of lobbying against stablecoins or attempting to contain them as a nuisance.
The decision to utilize public blockchains signals an intent to capture liquidity currently residing in the crypto-native ecosystem rather than retreating into the safety of private, permissioned ledgers. By moving beyond the defense of their existing deposit bases, these institutions are positioning themselves to compete for the bearer-instrument market long dominated by Tether and Circle.
The distinction between this consortium’s strategy and other ongoing bank initiatives is critical. While The Clearing House is building a shared tokenized deposit network for a 2027 launch, and Wells Fargo is separately developing a proprietary blockchain for USD-GBP tokenized deposits, these efforts remain tethered to the bank balance sheet. Tokenized deposits are essentially digital claims on a bank, carrying the comfort of FDIC insurance. Stablecoins, by contrast, are bearer instruments. By issuing stablecoins, these banks are stepping out of the protected, permissioned sandbox and into the open, competitive arena of public chains.
The regulatory architecture enabling this pivot is the GENIUS Act, enacted on July 18, 2025. The legislation provides a clear federal framework for bank stablecoin issuance through OCC-approved subsidiaries, effectively creating a regulatory moat. While the OCC’s 376-page Notice of Proposed Rulemaking (NPRM) from February 2026 — which details prudential requirements for Permitted Payment Stablecoin Issuers (PPSI) — is still pending finalization ahead of the January 18, 2027 effective date, the path is clear. Banks can now legally enter the space, provided they adhere to the act’s strict prohibition on paying interest directly to holders.
This regulatory clarity has forced a strategic divergence among the industry’s giants. JPMorgan, for instance, has explicitly opted out of the stablecoin race, choosing instead to double down on its proprietary JPM Coin and Kinexys deposit token infrastructure. The bank is betting that the future of institutional payments lies in controlled, high-speed, internal networks rather than the fragmented, public-chain landscape.
Bank of America CEO Brian Moynihan previously warned that $6 trillion in deposits could migrate to stablecoins if issuers were permitted to pay interest. His conclusion was pragmatic: “If they make that legal, we’ll go into that business.” The consortium’s move suggests that the industry has decided it is better to cannibalize its own deposit base than to lose it to non-bank issuers. As the Daily Hodl reported on August 28, major banks that once lobbied against stablecoins are now advancing their own initiatives to defend their payments business.
The consortium’s plan to start with USD-backed 1:1 assets before expanding into EUR and other G7 currencies suggests a focus on building a network effect that mirrors the global reach of the current stablecoin leaders, USDT and USDC. However, the transition from a traditional banking model to a public-chain issuer is fraught with operational friction. Banks must navigate the inherent tension between the transparency of public blockchains and the stringent compliance requirements of global banking regulators.
Furthermore, the consortium faces a fundamental question of utility. If these bank-issued stablecoins cannot pay interest — due to the GENIUS Act’s yield ban — they must compete on the basis of trust, liquidity, and integration with existing financial rails. They are betting that institutional users will prefer a stablecoin backed by a global banking syndicate over the existing market leaders. The success of this initiative hinges on whether the market prioritizes the institutional pedigree of a bank-issued asset over the established, crypto-native liquidity of USDT.