The approach to stablecoins in the U.S. banking sector is rapidly changing. Banks that previously believed demand for stablecoins would remain limited and prioritized tokenized deposit solutions are now considering the possibility of issuing their own stablecoins. It is also reported that JPMorgan Chase is considering issuing stablecoins.
According to sources close to the matter, the largest U.S. bank, JPMorgan, recently explored the possibility of launching its own stablecoin. The discussions are reportedly at an early stage, and active product development is not currently underway.
JPMorgan already has a tokenized deposit solution called JPM Coin and its own blockchain infrastructure. A bank representative stated that the company does not currently plan to issue a stablecoin, but all options could be considered in the future depending on client demand and the development of the regulatory environment.
Over the past year, the banking sector has lobbied against cryptocurrency companies in this area, fearing that stablecoins could compete with the traditional deposit system. As an alternative, banks have turned to "tokenized deposit" systems, where traditional bank deposits are represented by digital tokens on a blockchain.
While stablecoins typically function as standalone digital tokens pegged to fiat currencies such as the dollar or euro, tokenized deposits represent a digital representation of traditional bank deposits.
However, growing interest from major companies like Visa, BlackRock, Google, and DoorDash in the stablecoin ecosystem is forcing banks to reconsider their strategies. The stablecoin market is currently dominated by Tether and Circle.
Some bank executives are concerned that stablecoins could encroach on existing bank business models in payment systems and deposits, and therefore issuing stablecoins is also seen as a "defensive" strategy.
Besides JPMorgan, several other major banks are also working on joint stablecoin projects.
According to reports, several financial institutions, including Bank of America, Wells Fargo, and Santander, are making progress on a joint initiative to create a stablecoin that could be used worldwide.
According to sources, the stablecoin being considered by the banks will initially target corporate clients and will be based on the U.S. dollar. The euro and other G7 currencies are planned to be incorporated into the system at later stages.
It is claimed that stablecoin use cases may vary depending on the region.
*This is not investment advice.
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