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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Citizens snags exclusive Mastercard deal, Green Dot's e-bill-pay expansion and more in banking news this week.
January 20
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The digital-asset firm Nexo Capital will pay $45 million in penalties to U.S. federal and state regulators over allegations that it broke securities rules by offering a crypto lending product.
January 20
- AB - Policy & Regulation
Financial services regulators should treat cryptocurrency trading for what it is — another form of wagering, some experts say. But banks seeking to provide custody and many other services tied to digital assets would face even tighter restrictions under that approach.
January 18
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Genesis Global Capital, the cryptocurrency lending unit of Digital Currency Group, is laying the groundwork for a bankruptcy filing as soon as this week, according to people with knowledge of the situation.
January 18
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Digital Currency Group, the struggling crypto empire whose Genesis Global Capital lending unit is trying to stave off bankruptcy, said it's suspending quarterly dividends to preserve cash.
January 18
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Coinbase Global is halting operations in Japan, less than a month after another major digital-asset exchange, Kraken, announced its withdrawal from the country.
January 18
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The New York bank reported a 17% drop-off in deposits during the fourth quarter as it sought to reduce its concentration in the digital currency realm. It expects its balance sheet to stabilize in the second half of 2023.
January 17
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The former tech entrepreneur, "Razzlekhan" rapper and accused cryptocurrency thief Heather Morgan has a new job.
January 17
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Silvergate Capital Corp. reported a $1 billion loss and said it would offboard some noncore digital-asset customers following a quarter that saw a dramatic draw-down in deposits after the collapse of Sam Bankman-Fried's FTX.
January 17
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Signature Bank of New York is pulling back from crypto deposits and has increased borrowings from the Federal Home Loan Bank of New York.
January 17
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