Some of the world's biggest and most powerful banks, including Bank of America, Goldman Sachs, and Citi, are considering joining forces to issue a stablecoin — even if they're not calling it that.
In a statement from Friday, BNP Paribas and other banks are "jointly exploring the issuance of a 1:1 reserve-backed form of digital money that provides a stable payment asset available on public blockchains, focused on G7 currencies."
Other banks mentioned in the group include Banco Santander, Barclays, Deutsche Bank, MUFG Bank Ltd, TD Bank Group, and UBS. The goal of their "initiative" is to determine if an "industry-wide offering could bring the benefits of digital assets and enhance competition across the market, while ensuring full compliance with regulatory requirements and best practice risk management," according to the statement.
Although large banks, including Bank of America, have expressed interest in issuing a stablecoin, especially after new legislation in the U.S. provided regulatory clarity, the market is currently dominated by crypto-native firms. Circle and Tether, which is planning a stablecoin specifically for the U.S. market, are the world's two largest issuers.
U.S. dollar-pegged stablecoins are the dominant token pegged to a fiat currency and backed by reserve assets. The USD stablecoin supply, at the moment, registers at $290 billion and continues to climb. Many have predicted that the stablecoin market will grow into the trillions of dollars in the coming years as institutions adopt the digital currency as a method of settling transactions.
The banks also said they are "in contact with regulators and supervisors in each relevant market and will continue to keep appropriate parties updated as the project progresses."
