Big Banks Explore Venturing Into the Crypto World Together with a Joint Stablecoin

The image of Wall Street and blockchain sitting at the same table once seemed fanciful. Today it looks increasingly deliberate. In the spring of 2025, multiple reports surfaced that some of the nation’s largest banks are quietly exploring whether to team up to issue a joint stablecoin. The story is not just about banks wanting to mint a digital dollar; it is also about legacy lenders confronting a moment of strategic choice. They can either cede plumbing and transaction flows to fintechs, crypto firms, and big tech, or they can try to reclaim those flows by building bank-backed digital tokens that move money faster, cheaper, and with the compliance controls regulators expect. Early reporting indicated that talks are preliminary, that the discussions involve payments companies co-owned by major banks, and that the initiative would be shaped heavily by evolving regulation in Washington. (The Wall Street Journal, Reuters)

Why the idea of a joint stablecoin has traction

At its core, a stablecoin issued by banks answers several urgent questions for financial institutions. First, stablecoins are a payments primitive built for the digital era: they settle quickly, can be transferred peer-to-peer on blockchain rails, and can be integrated into automated contractual flows. For banks that have long depended on interbank nets, batch processing, and legacy messaging systems, a digital-token-based settlement vehicle promises lower friction and faster finality. Second, banks are worried about deposit and transaction disintermediation. If consumers and businesses shift balances into widely accepted private stablecoins or use crypto rails to move money, traditional deposit pools that fund lending and generate fee income could erode. Creating a bank-backed token is one way to offer many of the same conveniences while retaining trust, custody, and regulatory oversight. Third, a jointly issued product could scale more rapidly if it leverages existing clearing and payments infrastructure that big banks already control. Those infrastructure advantages make a consortium model particularly attractive for preserving market share. Early coverage named entities such as the Clearing House and Early Warning Services—payments companies already co-owned by big banks—as potential incubators for this kind of collaboration. (Fintech Takes, Reuters)

What “co-owned companies” means in practice

The phrase “co-owned companies” matters because banks rarely build every component of a new financial infrastructure in isolation. In the U.S., several payments utilities and networks are owned collectively by major banks. Early Warning Services, which operates the ubiquitous Zelle person-to-person payment network, is jointly owned by a consortium of large lenders. The Clearing House is owned by a group of big banks and operates a real-time payment network used extensively in wholesale and large-value transfers. Those entities already have reach, expertise in bank-grade compliance, and experience operating real-time rails. Bringing a stablecoin to market through such shared utilities would mean leveraging existing relationships with regional banks and integrating into familiar operational frameworks. It would also allow larger banks to offer a token that smaller institutions could adopt without having to build their own entire stack. That cooperative angle helps explain why the idea keeps reappearing in reporting about banks’ possible moves into digital assets. (Fintech Takes, The Wall Street Journal)

How this differs from earlier bank crypto experiments

Banks are not brand new to experimenting with tokenized money. JPMorgan’s earlier efforts, from JPM Coin to its Onyx (now rebranded Kinexys) initiative, provide a blueprint of what institutionally framed tokenization can look like: private blockchain rails, tokenized deposits for institutional clients, and faster settlement for targeted use cases. The new conversation around a joint stablecoin is distinct because it envisions a token that could be broader in reach and interoperable across institutions rather than limited to single-bank ecosystems or closed-network corporate clients. Meanwhile, individual banks like Bank of America and others have signaled they are developing their own stablecoin capabilities, showing there’s both convergent and divergent interest within the industry. Those independent efforts, combined with the prospect of a shared token, suggest banks are trying multiple approaches to understand what scale, governance, and product-market fit might look like in practice. (CoinDesk, Reuters)

The regulatory backdrop shaping bank motivations

Banks are exploring stablecoins at a moment when the legal framework for digital assets is shifting in the United States. The passage of landmark stablecoin legislation through procedural votes and bipartisan momentum in Congress has signaled to banks that the regulatory risk calculus is changing. Clearer legal boundaries reduce one of the principal hesitations financial institutions have had about issuing or using tokenized money: the fear of running afoul of banking, securities, or anti-money-laundering rules. If Congress and regulators provide a well-defined path for bank-issued stablecoins—one that delineates reserve requirements, custody rules, and compliance obligations—then banks can move faster with less existential legal risk. This political and regulatory thaw is an important reason larger lenders are now publicly talking about tokenized deposits and stablecoin pilots. (Reuters)

Business rationales: preserving deposits, capturing fees, and improving balance-sheet efficiency

When finance leaders talk candidly about stablecoins, three commercial drivers come up again and again. The first is protecting deposit bases. Deposits are the lifeblood of traditional banks; they provide a low-cost source of funding for loans and a source of fee income. If customers route transactions and balances into non-bank stablecoins or fintech-managed wallets, a bank’s ability to fund itself and originate lending shrinks. A bank-backed stablecoin is a defensive move to keep that liquidity within the regulated banking system. The second driver is fees and transactional economics. Even if deposits remain on bank balance sheets, a tokenized payment rail creates new revenue opportunities through transaction fees, settlement services, and platform subscriptions for connectivity and compliance tooling. The third driver is operational efficiency. Tokenized assets can automate and compress settlement cycles, reduce reconciliation costs, and unlock programmable finance use cases that attract corporate clients. Taken together, these commercial incentives form a strong business case for banks to consider digital tokens as both a defensive and offensive product strategy. Reporting on CEOs and executives from major banks suggests that leaders are actively weighing these trade-offs as they allocate technology and capital resources. (Reuters)

Technical and operational design choices that will matter

Design choices will determine how bank stablecoins perform in the real world. Decisions about where tokens will be issued (on private permissioned ledgers versus public blockchains), how reserves will be held and audited, the onboarding and KYC processes, and whether tokens will be transferable off-network are core to both product-market fit and regulatory acceptability. Banks may favor permissioned networks to retain control over access and compliance, while also offering APIs and bridges to public blockchains for corporate clients that need broader interoperability. Reserve management will need to be transparent and tightly regulated, with independent auditing and clear rules about what collateral backs each token. Finally, the governance model will be crucial: a consortium that issues a stablecoin must agree on upgrade paths, dispute resolution, and how to onboard new members without creating systemic risk. These technical and governance trade-offs will shape whether any joint bank stablecoin becomes widely adopted or remains a niche institutional utility. (CoinDesk, PaymentsJournal)

Competition from non-bank stablecoins and the fintech threat

The urgency for banks arises from real-world competitive pressure. Non-bank stablecoin issuers and crypto-native firms have built rails for rapid transfers, settlements, and programmatic finance that bypass traditional interbank processes. Large technology platforms and fintech firms are also embedding payment experiences directly into consumer and business products, which can further normalize keeping a balance outside of a bank. These players have an innovation advantage in user experience and nimbleness, but they lack bank charters and direct regulatory oversight—or in some cases, they operate under different supervisory regimes. For banks, the challenge is to combine the trust and regulatory advantages of a charter with the speed and usability of modern software-native payment experiences. A jointly issued stablecoin would be a way to bundle those strengths and present a bank-sanctioned alternative that competes on product and trust. Recent market developments, including corporate and institutional pilots, indicate that the race for an acceptable and scalable token is a live strategic priority. (Reuters)

Risks: liquidity, contagion, governance, and reputational exposure

No discussion of bank-issued tokens is complete without acknowledging the risks. A stablecoin that grows rapidly could become a systemic player in payments and liquidity. If reserves backing the token are mismanaged or if redemption promises face stress during market turmoil, the reputational and financial fallout for participating banks could be severe. There are also contagion risks if many institutions are interconnected through the same token and a technical or legal failure occurs. Governance disputes inside a consortium could create coordination failures at precisely the wrong moment. Banks must also weigh reputational risks: being associated with a token that is perceived as unsafe or as a vehicle for illicit flows could damage public trust. That is why many of the operational design choices—such as reserve transparency, auditability, and legal clarity—are being discussed so intensively in boardrooms and regulators’ briefings. (Reuters)

How a joint stablecoin could be monetized and scaled

If designed carefully, a bank-backed token could create new revenue streams without destabilizing incumbent business models. One monetization path is fees for settlement and message routing, particularly for cross-border transactions where current correspondent banking is slow and expensive. Another is subscription or connectivity fees for smaller banks and fintechs that want to plug into a secure token network without building the infrastructure themselves. Large corporate clients may pay for embedded treasury services that use tokenization to manage liquidity and instantly move funds across jurisdictions. There is also potential for ancillary services such as custody, wrapped assets, or tokenized short-term instruments that sit on the same rails. To achieve scale, banks will need clear pricing, easy onboarding, and a suite of developer tools that make integrating tokens into ERP and treasury systems straightforward. Early pilots and announcements suggest banks are testing both the technical feasibility and the business cases that would underpin a sizable rollout. (Reuters, Banking Dive)

The role of smaller banks and alternative consortiums

While the big banks have scale and network reach, there is also discussion among regional and community banks about forming separate consortiums. Smaller institutions have legitimate concerns about being marginalized in a consortium dominated by large lenders, so separate initiatives could emerge that cater to different market segments. Alternatively, a widely adopted joint token tied to established utilities might include governance mechanisms that protect smaller members and allow for equitable participation. How inclusivity is handled will shape the political economy of any token and influence whether regulators view the initiative as competitive and fair or as consolidation of market power. Reporting suggests that some regional banks are exploring their own paths while watching the larger banks’ moves closely. (Fintech Takes)

What could derail the project

Regulatory setbacks, adverse market events, or complexity in building interoperable technical standards could stall or scuttle a joint stablecoin push. If legislators or supervisors impose onerous reserve or audit requirements that make the economics unattractive, banks might shelve joint plans and instead pursue narrower tokenization initiatives. Conversely, a high-profile operational failure in the crypto space could make regulators and clients more cautious, slowing adoption. Finally, banks may simply disagree on governance, commercial splits, or how to onboard third parties; such coordination failures are a common reason consortium projects languish. Observers will be watching not only for technical milestones but also for public signals from CEOs and regulators about willingness to proceed. (Reuters)

The likely near-term path: pilots, hybrids, and layered solutions

Realistically, the market will see layered and hybrid approaches rather than an immediate, broad-based joint stablecoin. Expect to see pilots that use permissioned ledgers for institutional flows, tokenized deposit experiments for wholesale clients, and constrained public pilots for specific cross-border corridors. Banks may launch proprietary tokens for particular clients while contributing to shared utilities that provide common rails and governance. The industry will also lean into transparent reserve practices and independent audits to satisfy both regulators and institutional counterparties. Over time, these layered pilots will teach banks what customers value and which business models make economic sense, creating a gradual path from experimentation to potentially broader adoption. Reporting in mid-2025 has already shown CEOs and CFOs discussing token strategies in earnings calls, indicating the conversation has moved from theoretical to tactical. (Reuters, Banking Dive)

Conclusion: a pragmatic pivot, not a cryptocurrency romance

The drive by big banks to explore a joint stablecoin is less about romance with cryptocurrency and more about pragmatic corporate strategy. Banks want to preserve deposits, control critical payment rails, reduce settlement friction, and monetize new transactional use cases in an increasingly digital world. A jointly issued, bank-governed stablecoin could help maintain the regulated financial system’s primacy while offering many of the user experience advantages that crypto pioneers brought to market. But success will depend on sensible technical architecture, transparent reserve management, robust governance, and a regulatory framework that balances innovation with safety. As pilots evolve and legislators provide clarity, the coming months and years will reveal whether a bank-backed token becomes a new, durable plumbing for finance or merely another experiment in an industry grappling with digital transformation. Early signals from banks, payments utilities, and regulators indicate this is a story worth watching closely.

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