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A couple of weeks ago I wrote that the bank led stablecoin race was hotting up as nine of Europe’s largest banks unveiled plans to issue a euro-denominated stablecoin, the consortium includes ING, CaixaBank, Banca Sella, KBC, Danske Bank, DekaBank, UniCredit, SEB and Raiffeisen Bank International.
Launch of G7-backed stablecoin
Today another coalition of nine major global banks — including Goldman Sachs, Deutsche Bank, Bank of America, Citi, Santander, BNP Paribas, MUFG, TD Bank, and UBS — is exploring the creation of a joint stablecoin pegged to G7 currencies.
The initiative marks the most coordinated move yet by traditional finance to capture a growing share of the digital payments market dominated by crypto-native firms.
The banks plan to issue reserve-backed digital assets available on public blockchains, with each unit pegged one-to-one against fiat currencies such as the US dollar, euro, and yen.
The group said it is already engaging with regulators across multiple jurisdictions as part of its feasibility study.
The goal is to determine whether a shared stablecoin could enhance efficiency, reduce settlement friction, and strengthen competition in the rapidly evolving payments landscape — all while maintaining strict regulatory compliance.
Banking on Blockchain
The move underscores how global lenders are accelerating blockchain adoption as regulatory clarity improves in the US and Europe.
Both jurisdictions have recently finalised frameworks for stablecoin issuance, paving the way for institutional participation. Bloomberg Intelligence projects that stablecoin-enabled payment flows could exceed $50 trillion annually by 2030, highlighting the scale of the opportunity.
So far, stablecoins have been used primarily for crypto trading, but banks believe tokenised fiat could reshape cross-border payments, liquidity management, and securities settlement.
By embedding stablecoin infrastructure into their existing networks, institutions hope to offer faster and cheaper settlement while maintaining the trust, compliance, and risk oversight expected of regulated financial entities.
Strategic Stakes for Traditional Finance
The business case is clear. Stablecoin issuers like Tether Holdings earn billions annually from the interest on Treasury securities and cash equivalents that back their tokens.
By contrast, commercial banks currently capture little of the value generated by reserves sitting idle at central banks.
Stripe CEO Patrick Collison recently argued that stablecoins will force banks to offer higher deposit yields, as consumers increasingly shift funds into on-chain assets that mirror dollar holdings.
Standard Chartered has warned that such adoption could drain more than $1 trillion in deposits from emerging market banks by 2028 as customers seek digital dollars.
This risk explains why regulators, including the Bank of England and European Central Bank, are scrutinising private stablecoin initiatives closely.
Cross Sector Effort
The consortium’s project follows similar efforts across the sector. HSBC and BNY Mellon are trialling tokenised deposits, while SWIFT is testing blockchain settlement with major European lenders.
A separate group is developing a MiCA-compliant euro stablecoin, expected to launch by mid-2026.
With forecasts from Coinbase suggesting the stablecoin market could reach $1.2 trillion by 2028, the race is now on for banks to reclaim territory from crypto firms and fintech challengers.
Whether through partnership, proprietary issuance, or infrastructure integration, one thing is increasingly certain: the age of blockchain-based banking has begun.
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