Major Banks Rethink Stablecoins as Crypto Payment Competition Intensifies

According to the Wall Street Journal on Aug. 26, banks in the U.S. are taking a fresh look at stablecoins as crypto firms and tech companies push into payments. Banks are exploring products or services, without formally committing to launches.

JPMorgan has considered launching its own stablecoin but does not have one at present. In a statement, a spokeswoman said the bank, which CEO Jamie Dimon warned needed to explore stablecoins as competition from fintech grows, would evaluate if it needed to reconsider its options as demand and regulations evolved.

The bank already has JPM Coin on its corporate blockchain, the Kinexys blockchain platform. But this is a tokenized deposit, giving a claim on JPMorgan, rather than a stablecoin with a reserve portfolio. This distinction is important, because banks still need to weigh their business needs against the blockchain-based payment schemes.

More than a dozen more banks are reported to be considering joining the consortium, including Bank of America, Wells Fargo and Santander, and the platform may be extended beyond the US dollar-pegged token to the euro or other G7 currencies post-launch. There is currently no known membership list, governance framework, reserve framework or launch schedule.