The Banks That Fought Stablecoins Are Now Building Them
Per WSJ, Gina Heeb and Vicky Ge Huang report that banks large and small have started warming to issuing their own stablecoins, a year after executives dismissed the demand and the industry lobbied hard against letting nonbank issuers offer instruments that behave like deposits. More than a dozen institutions including Bank of America, Wells Fargo and Santander are moving forward on a global stablecoin venture aimed at commercial customers, covering the dollar first, then the euro, then other G7 currencies. JPMorgan has evaluated whether to launch one, though the bank says the conversations were preliminary and there is no active product.
The smaller banks are organizing too. A consortium of 39 state bankers associations representing roughly 3,000 banks unveiled the BankChain Alliance this week, a bank-owned blockchain platform modeled loosely on the Federal Home Loan Bank system and built for treasury management, supply chain finance and cash management. It is expected to launch in the first half of 2027 and will support both tokenized deposits and stablecoins. Anchorage Digital chief executive Nathan McCauley says his firm has more than a dozen stablecoin projects in its pipeline, a subset of them from banks and bank-led consortia.
The reversal is worth stating precisely, because it is a defensive one. Banks preferred tokenized deposits for a straightforward reason: those are ordinary deposits represented as tokens, so they carry the same credit risk profile, regulatory expectations and accounting treatment, and the money stays inside the banking system. Stablecoins do not. What changed is the entrant list. Visa, BlackRock, Google and DoorDash have all moved into a market dominated by Tether and Circle, and issuance by nonbanks pulls balances out of deposits regardless of whether bank executives think the product is necessary. Building one is the response to that risk rather than an endorsement.
The unresolved fight is yield. Banks argued through the Clarity Act process that allowing stablecoins to pay rewards would trigger deposit flight, which is the same concern that motivated the original opposition and remains the variable that determines how much balance actually migrates. Skeptics have not gone quiet either. Brookings senior fellow Aaron Klein argues that if the goal is programmable money, tokenized deposits can deliver it without requiring a whole new financial architecture. The counterargument from stablecoin proponents is portability: tokens designed to move across public chains, against tokenized deposits issued on private networks where one bank's system does not necessarily connect to another's.
Meanwhile the traffic runs both directions. World Liberty Financial's trust company received preliminary conditional OCC approval to become a bank, which would let it issue, redeem and safeguard USD1, its $4 billion dollar-backed token. OCC head Jonathan Gould said at the Wyoming Blockchain Symposium last week that payment stablecoins are becoming ordinary course in the business plans now reaching his agency. Issuers are becoming banks while banks are becoming issuers.
What to watch is whether the bank consortia ship anything before 2027 and where the yield question lands. Total supply from the six largest issuers sits near $260 billion, most of it Tether, built without any of these institutions. The banks are entering a market that formed while they were arguing it should not exist.