21 Financial Institutions Announce Plans for US Dollar Stablecoin

Twenty-one financial institutions, including major banks and asset managers, have committed to establishing a jointly backed company to issue a US dollar stablecoin. The group aims for a market launch in the first half of 2027, with plans to expand into other G7 currencies, starting with the euro. This announcement follows an earlier exploration by ten of the same institutions, which began nearly a year ago.

The new consortium includes eight of the original ten banks, such as Banco Santander, Bank of America, and Deutsche Bank, while Barclays and BNP Paribas are not part of the latest group. Thirteen additional firms have joined, including Capital One, Fidelity Investments, and Scotiabank, representing a mix of North American, European, and Middle Eastern entities. Notably, three of the participants are asset managers rather than banks.

The stablecoin initiative is set to comply with the forthcoming US stablecoin law, known as the GENIUS Act, which will take effect in early 2027. The venture plans to serve wholesale, institutional, and retail markets, facilitating cross-border payments and digital asset settlements. However, six of the participating banks are also involved in a competing project aimed at developing a shared tokenized deposit network, which is expected to launch around the same time.

In related market movements, Circle's shares fell by over 6% on the day of the announcement, while stablecoin prices for USDT and USDC remained stable. The total circulating supply of stablecoins currently stands at approximately $310.4 billion, with Tether and Circle dominating the market.

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Source: KLEA News