JPMorgan, Bank of America, Citigroup, Wells Fargo consider stablecoin launch as GENIUS Act advances in US Senate

• Major US banks, including JPMorgan, Bank of America, Citigroup and Wells Fargo in early-stage talks to jointly issue a stablecoin.
• The proposed stablecoin pegged to the US Dollar aims to compete with assets like Tether’s USDT and Circle’s USDC.
• The monumental GENIUS act, designed to regulate the stablecoin market, advances through the US Senate ahead of the final vote.
• Supporters of the stablecoin bill laud the development for its potential role in modernizing US payment rails. 

Major United States (US) banks, including JPMorgan Chase, Bank of America, Citigroup and Wells Fargo, are eyeing a joint stablecoin venture amid a potential seismic shift in crypto regulations following the advancement of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act in the Senate.

Major US banks eye joint stablecoin venture

US leading banks are in early-stage talks that could see them collaborate to launch a stablecoin project, according to a recent Wall Street Journal (WSJ) report. The move, which comes amid optimism for the first elaborate crypto regulation bill focusing on stablecoins, will take advantage of partner networks like Zelle, operated by Early Warning Services and The Clearing House, which handles real-time payments.

Stablecoins refer to cryptocurrencies pegged to stable assets such as the US Dollar (USD) to minimize price volatility, synonymous with crypto assets like Bitcoin (BTC). 

The asset class combines blockchain technology’s speed and security with the stability of traditional currencies, making it ideal for payments, trading and Decentralized Finance (DeFi).

Tether’s USDT is the largest stablecoin with a market capitalization of $152 billion. Circle’s USDC comes second with a market share of around $61 billion, while USDS (USDS) is in third place with roughly $6.9 billion. Collectively, the stablecoin market boasts a $245 billion capitalization, up approximately 17% since the beginning of the year.

The joint stablecoin project would be designed to initially serve the interest of the partner banks, with the option of opening it up to other financial institutions. It promises faster, cheaper and safer cross-border transactions.

US GENIUS Act advances in Senate

The bipartisan bill sponsored by Senators Bill Hagerty, Cynthia Lummis, Kirsten Gillibrand, and Tim Scott advanced in the US Senate “invoking cloture in a 66–32 vote,” a K33 Week-in-Crypto report states.

This advancement marks a monumental step towards achieving the first comprehensive federal regulatory guidelines for payment stablecoins. Under the bill, state authorities will oversee smaller players. At the same time, issuers with more than $10 billion in market share will fall under the jurisdiction of the Federal Reserve and the Office of the Comptroller of the Currency (OCC).

Supporters of the bill believe that when passed, the GENIUS Act will play a big role in modernizing payment rails in the US and ensure the country stays at the forefront of financial innovation.

“With the Senate poised for a final vote and companion legislation pending in the House, the crypto sector now looks ahead to securing the certainty needed to expand digital-asset services,” the K33 report highlights.

Since President Donald Trump took office in January, the US has gravitated towards establishing clear regulations for the cryptocurrency industry while intentionally stepping back from enforcement-based oversight, which characterized Gary Gensler’s tenure as the Chairman of the Securities and Exchange Commission (SEC).

Paul Atkins, the current SEC Chair, has promised to stop regulation by enforcement and is keen on working with industry stakeholders to formulate clear and comprehensive frameworks that steer innovation.