A consortium of major banks, including Bank of America, Citi, Deutsche Bank, Goldman Sachs, and UBS, announced on Friday that they will collaborate to explore the development of stablecoins pegged to G7 currencies.
Currently, the stablecoin market is heavily dominated by Tether (USDT), based in El Salvador, which accounts for approximately $179 billion of the total $310 billion in stablecoins circulating, according to data from CoinGecko.
In addition to this consortium, a separate group of nine European banks, including prominent names like ING and UniCredit, is also in the process of launching a euro-denominated stablecoin.
Meanwhile, Citi has made strides in the stablecoin space by investing in BVNK, a company focused on stablecoin infrastructure.
Harmse remarked on the increasing demand for stablecoin infrastructure, particularly with the emergence of regulatory clarity through the passage of the GENIUS Act in the US. This has prompted major US banks to strategically position themselves in the crypto ecosystem.
Banks are increasingly investigating how blockchain technology—originally developed to support Bitcoin—can reduce transaction costs and enhance processing speeds across various financial operations.
This exploration includes the concept of tokenization, which involves creating digital tokens that represent traditional assets, such as deposits. For instance, Bank of New York Mellon is currently looking into tokenized deposits, while HSBC has already rolled out a tokenized deposit service.
Featured image from DALL-E, chart from TradingView.com
