As legislation to create a regulatory framework for stablecoins progresses in the US Congress, major banks are reportedly discussing issuing a joint stablecoin that could potentially provide commercial clients with various benefits.
The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act could become law this summer after taking a significant procedural step forward last month in the Senate. Meanwhile, industry participants are preparing. In April, The Wall Street Journal reported that several cryptocurrency firms, including Circle, a major stablecoin issuer and crypto-exchange operator, will seek bank charters. In late May, the newspaper broke news regarding plans by companies co-owned by JPMorgan Chase, Bank of America, Citigroup, and other large banks, including Early Warning Services and the Clearing House, to issue joint stablecoins.
The first Trump administration issued interpretive letters approving banks to offer crypto services, including holding reserves backing stablecoins.
Circle’s USDC stablecoin is widely used in crypto-institution finance, says David Easthope, head of fintech at Crisil Coalition Greenwich. In contrast, Tether’s USDT is favored by businesses preferring to transact in US dollars rather than volatile local currencies. Both USDC and USDT are tied to the dollar.
Ripple’s XRP has enabled cross-border payments for several years, but most still travel through a network of correspondent banks. Mike Johnson, EY Americas Financial Services Solutions leader for Digital Assets and Tax, says complex cross-border wire payments that currently take one to three days could be settled nearly instantly using stablecoins.
“Transactions costs could decrease from traditional $10-$50 wire fees to less than $0.01,” he says.
Johnson also notes that stablecoins could enable instant intercompany transfers and more agile liquidity management, adding, “Stablecoins could also offer faster, lower-cost options for cross-border payroll, contractor payouts, and remittances.”
However, according to Easthope, it remains unclear whether the advantages of a jointly issued bank stablecoin would draw companies away from those they may already be using or even from conventional technology integrated into their existing platforms.
“Banks would test and learn within the parameters of the GENIUS Act,” he adds, “and clients will vote with their stablecoins.”
