Banks line up to embrace stablecoins

June 30, 2025 6:00 AM

Bank of America - JPMorgan Chase - Wells Fargo

Stablecoins have gotten a lot of attention in recent months, pushing financial institutions to consider how to respond to the trend.

The result has been a rush of news of banks kicking the tires on bank-issued stablecoins — developing their own coins, joining a consortium or some combination. Banks are also considering stablecoin alternatives that promise the same benefits of stablecoins, such as faster processing, supporting distributed finance and managing currency fluctuations, but with less perceived risk.

Stablecoins, which are supposed to be backed by reserves such as U.S. dollars, are considered the form of cryptocurrency most likely to support payments and other traditional financial services. The number of stablecoins in circulation has increased in recent years, and that growth is expected to accelerate.

The expected passage of the GENIUS Act, which is designed to regulate stablecoins in the U.S., is spurring banks to action in the stablecoin market, a space that fintechs such as Tether and Circle currently dominate.

"For a bank or credit union, having a strategy in place is important to define which role, if any, to take, be it issuance, custody, distribution, orchestration, acceptance, etc., as well as to understand how competitors, fintechs or clients adopting stablecoins could pose a threat," Christophe Uzureau, vice president and analyst at Gartner, told American Banker.

Here's a sample of banks that have announced stablecoins, are reportedly working on stablecoins or are developing products similar to stablecoins.

Bloomberg

Bank of America

At a Morgan Stanley-hosted event in June, Bank of America CEO Brian Moyinhan said, "We have to have it. The industry has to have it. We've not been quite sure how big it will be, but we have to be ready." Moynihan referenced stablecoins amid the perceived crypto-friendly posture of the Trump administration, which has helped stablecoin regulation advance faster than during the Biden administration. At the conference, the BofA CEO said regulatory clarity would enable the bank to determine if there is a business case for stablecoins.

Fifth Third

Also at the June Morgan Stanley conference, Bryan Preston, the chief financial officer of the $213 billion-asset Fifth Third, said stablecoins could be used to make international payments instantaneously, or to move collateral instantly from market to market. "We're always trying to look ahead," Preston said at the conference. "We think that there are some interesting places where stablecoin can really create some efficiencies in the commerce space."

Bloomberg

U.S. Bancorp

Gunjan Kedia, CEO of the $676 billion-asset U.S. Bancorp, told Morgan Stanley's conference that the bank released a cryptocurrency custody product in 2021, but it didn't gain steam, partly due to the lack of regulatory guidance at the time. "The product didn't really take off because the regulatory regime at that point was very uncertain for large institutional investors," Kedia said at the Morgan Stanley event. "That product is back, and we are very able to provide it." The CEO also said U.S. Bancorp is studying how it could help use stablecoin for payments, but much of that will depend on how the new regulations shape up.

Bloomberg

Citigroup

Citigroup, along with Bank of America, JPMorganChase and other large banks, is reportedly studying whether to issue a joint stablecoin. The pooled stablecoin would help the banks provide the scale necessary to support payments across a wide range of merchants and consumers. For banks considering issuing a stablecoin, it is important to note that creating a profitable stablecoin venture is becoming challenging. "The market should not expect that the current profitability of issuers such as Tether is sustainable," Uzureau said. "This is due to changes in the return on assets serving as reserves, market fragmentation, higher regulatory requirements, and other factors."

Bloomberg

Wells Fargo

Wells Fargo is also among the consortium of large banks considering a stablecoin. The structure is still under consideration, but it could use technology from Early Warning, the bank-led firm that operates the Zelle money transfer service and the Paze mobile wallet. It's also possible banks could issue their own stablecoins and participate in a consortium.

The potential for "glut" in the stablecion market could be a challenge in connecting with consumers, particularly in a mature economy that has a modern payments industry. That could favor a bank network concept for stablecoins.

"It is like a return to the days when each bank issued its own paper currency, which could only be redeemed at that bank," Aaron McPherson, principal at AFM Consulting, told American Banker. "For this reason, a consortium approach, like Fiserv is doing, makes more sense."

Bloomberg

JPMorganChase

While it's part of the reported bank consortium studying a stablecoin, JPMorganChase is also issuing a "permissioned USD deposit token." Deposit tokens are a claim on an existing deposit at a regulated bank and are issued on a distributed ledger, or the structure that underpins cryptocurrency.

That makes deposit tokens easier to transfer between consumers or businesses, particularly in different countries. But it also is more closely tied to a bank, which payment analysts have said some businesses may not like.

The bank also issues Kinexys Digital Payments. Formerly called JPMCoin, it's a digital token that is used to streamline business payments and perform similar tasks to stablecoins.

Bloomberg

Societe Generale

Societe General's stablecoin, called USC CoinVertible, will launch in July using two blockchains, Solana and ethereum. The bank is responding to the Europe Markets in Crypto-Assets, or MiCA, the European cryptocurrency regulation that stablecoin issuers have said provides legal clarity for stablecoins, similar to the GENIUS Act in the U.S.

Caitlin Long, founder and chief executive officer of Custodia Bank.

Bloomberg

Vantage Bank and Custodia

The two banks began issuing tokenized deposits, called Avit tokens, in March. Vantage provides traditional banking services, while Custodia supports the distributed ledger technology. The two banks executed transactions including the mint, transfer and redemption of the Avit tokens, and ensured compliance with U.S. banking regulations.

Maya Barkai

Credit Unions and community banks

Smaller financial institutions will likely adopt stablecoins later, though payment experts say it will take time for the market demand for stablecoins to become clear — meaning credit unions and banks do not necessarily need to be early movers.

At least one credit Union, Teachers Federal Credit Union, said it is considering its stablecoin strategy.

Fiserv and Metallicus are among the companies building technology to support stablecoins or demand deposit tokens for smaller financial institutions. While it did not release names, Metallicus said several credit unions are set to test stablecoins as early as July.