Stablecoins
How are banks approaching dollar-backed digital assets (stablecoins)?
Stablecoins have moved from the edge of the
Banks are testing stablecoins for cross-border payments, liquidity management, and digital wallets. Some are also exploring how stablecoins can support interbank transactions or be issued directly by regulated institutions. As the landscape takes shape, stablecoins are starting to look less like an experiment and more like infrastructure.
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Finance that relies on smartphones and smart contracts can lower costs for banking services and promote financial inclusion, proponents say. But a look at who is using the technology tells a different story.
August 24
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The Federal Reserve has been circumspect about whether it will issue its own digital currency. Observers are looking to an upcoming report by the central bank for clarity about its intentions and how a digital dollar would work with private stablecoins.
August 23![According to one observer, Fed Chairman Jerome Powell “has been very clear in saying, 'I want to do [a central bank digital currency] right rather than do it fast.' ”](https://arizent.brightspotcdn.com/dims4/default/6cd2847/2147483647/strip/true/crop/6000x3375+0+624/resize/1280x720!/quality/90/?url=https%3A%2F%2Fsource-media-brightspot.s3.us-east-1.amazonaws.com%2F00%2F2a%2Fb797e54d42da9e4d1bde58c51843%2Fpowell-jerome-bl-082321.jpg)
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A consortium including Coinbase Global said all the reserves of the second-largest cryptocurrency stablecoin will shift into cash and short-term U.S. Treasurys, forgoing riskier investments.
August 23
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The IRS and Justice Department waged a successful campaign to crack down on UBS and other Swiss banks for facilitating tax evasion. Coinbase, Kraken and other crypto exchanges should take note.
August 23
Fox Rothschild LLP -
CEO Thomas Cangemi is pushing to modernize a bank that for decades was focused largely on multifamily lending. The company has already agreed to buy the mortgage lender Flagstar Bancorp and its partnership with Figure Technologies, a blockchain-focused fintech, has the potential to make that acquisition more productive.
August 18
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Most people aren't spending bitcoin in stores, but major point-of-sale terminal makers are developing technology and business relationships on the belief that demand will build fast.
August 17
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New York Community Bancorp says it will invest in Figure Technologies, which has developed an open source distributed ledger. The bank plans to use the technology to cut costs in mortgages and payments and promote financial inclusion.
August 16
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CoinFund, a blockchain-focused investment firm, hired Christopher Perkins from Citigroup as managing partner and president to help bridge the gap to the traditional finance sector.
August 12 -
The billionaire entrepreneur, Dallas Mavericks owner and "Shark Tank" co-host has always been outspoken. In a recent interview, he shared his thoughts on the shortcomings of the Paycheck Protection Program, the problem with bank consolidation and the future of cryptocurrency.
August 12
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The Boston-based cryptocurrency firm says it would welcome the tough oversight that comes with being a bank. Yet Biden-era regulators have shown apprehension about granting approvals to digital-asset firms.
August 10
![According to one observer, Fed Chairman Jerome Powell “has been very clear in saying, 'I want to do [a central bank digital currency] right rather than do it fast.' ”](https://arizent.brightspotcdn.com/dims4/default/ca2fa2a/2147483647/strip/true/crop/6000x3375+0+624/resize/1440x810!/format/webp/quality/90/?url=https%3A%2F%2Fsource-media-brightspot.s3.us-east-1.amazonaws.com%2F00%2F2a%2Fb797e54d42da9e4d1bde58c51843%2Fpowell-jerome-bl-082321.jpg)
The first three months of the year coincide with the start of President Donald Trump's second term in office. Investors are likely to be more interested in banks' outlooks amid swings in tariff policy than the first-quarter results.
Frequently Asked Questions:
How are banks approaching dollar-backed digital assets (stablecoins)?
Stablecoins have moved from the edge of the crypto, world to the center of policy and banking conversations. As regulators and banks weigh their role in payments, settlement, and reserves, this page follows the developments — from early pilots to proposed legislation.
Banks are testing stablecoins for cross-border payments, liquidity management, and digital wallets. Some are also exploring how stablecoins can support interbank transactions or be issued directly by regulated institutions. As the landscape takes shape, stablecoins are starting to look less like an experiment and more like infrastructure.
Why are banks paying attention to stablecoins?
Stablecoins are increasingly viewed as a potential upgrade to legacy payments systems. Banks are evaluating them for settlement, remittances, cross-border transactions, and tokenized deposit models.Are banks issuing their own stablecoins?
Some are exploring the option. Institutions like JPMorgan (with JPM Coin) and new entrants like PayPal are piloting bank-issued stablecoins, while others are watching regulatory developments before moving forward.How do stablecoins impact compliance and risk?
Issues include KYC/AML enforcement, cybersecurity, operational risk, and how reserve assets are held and reported. Banks exploring stablecoin activity must weigh both technological benefits and regulatory scrutiny.How are regulators responding to stablecoin innovation?
Congress is debating stablecoin-specific bills focused on reserve backing, issuer licensing, and oversight. The Federal Reserve, OCC, and state regulators are also shaping how bank involvement in stablecoin activity is supervised.How are banks using stablecoin?
Banks are using stablecoins to speed up cross-border payments, manage liquidity across global branches in real time, and test new forms of settlement between institutions. Some are integrating stablecoins into retail-facing digital wallets, while others are exploring interbank networks built on tokenized payments. These efforts are less about crypto speculation and more about making money move faster, with greater transparency and fewer intermediaries.- Real-time cross-border payments
- Internal liquidity management
- Retail-facing digital wallets
- Interbank tokenized payment networks
Top banks investing in stablecoin
List of institutions with greatest investment in stablecoin:- JPMorgan Chase – JPM Coin
- Custodia Bank – Avit Tokens
- Citigroup - Citi Token Services
- Societe Generale - USD CoinVertible
- Bank of America - Name yet to be released
- Fifth Third - Name yet to be released
- U.S. Bancorp - Name yet to be released