London, Oct 11 (V7N) – Ten leading global banks, including Bank of America, Deutsche Bank, Goldman Sachs, and UBS, have announced a joint initiative to explore issuing a stablecoin, signaling traditional finance’s growing engagement with digital assets. The consortium also includes Citi, MUFG, Barclays, TD Bank, Santander, and BNP Paribas.

The project, currently in its early stages, aims to evaluate the potential of blockchain-based assets pegged 1:1 to G7 currencies, a type of cryptocurrency known as stablecoins. According to a joint statement released on Friday, the banks intend to explore whether an industry-wide stablecoin could enhance competition, offer benefits of digital assets, and fully comply with regulatory requirements and risk management best practices.

Interest in stablecoins has risen alongside a surge in crypto prices and renewed U.S. political support for the sector. While stablecoins have mainly been used to transfer funds within crypto markets, regulators have expressed concerns that widespread adoption could bypass traditional banking systems, potentially affecting global payment flows. The Bank of England and European Central Bank have both highlighted risks associated with privately issued stablecoins.

Currently, Tether dominates the market with $179 billion of the $310 billion in circulation, while France’s Societe Generale issued a dollar-backed stablecoin earlier this year, though adoption remains limited. Separately, a consortium of nine European banks plans to launch a euro-denominated stablecoin. Many banking executives view the tokenization of financial assets, such as deposits, stocks, and bonds on blockchain, as holding greater long-term potential than stablecoins.

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