Banks Unveil ‘BankChain’ Alliance to Rival Crypto Stablecoins

39 banking associations in the United States have jointly formed the “BankChain Alliance” to curb their fears of client and capital flight into blockchain-based stablecoins.

Banks compete with stablecoins via on-chain banking

Initiated by the Texas Banking Association, the consortium represents thousands of community and mid-sized commercial banks looking to develop a 24/7, nationwide, bank-governed and permissioned blockchain by the year 2027.

The network would be characterized by security and compliance just like a traditional banking setup, with the addition of blockchain infrastructure. This modus operandi would enable banks to conduct near-instant settlement of digital assets, appealing to the evolving fintech space that now favors blockchains over legacy infrastructure.

Additional features

The blockchain will feature tokenized deposits for clients to convert standard bank deposits into digital tokens on a shared ledger. This unlocks instant liquidity and transactions, while eliminating the need to withdraw funds from the bank.

Secondly, the banks plan to issue native FDIC-compliant and fully backed stablecoins. This will give clients a regulated alternative to private stablecoins like USDT and USDC.