Bank of America, Citigroup and Goldman Sachs Explore Issuing Stablecoins Pegged to G7 Currencies

Paul
3 hours ago Updated 2 hours ago
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Bank of America, Citi, and Goldman Sachs explore G7-pegged stablecoin initiative.

Highlights

  • Major banks have come together to launch a G7-pegged stablecoin in an effort to increase the use of crypto.
  • The pro-crypto policies by Trump provide new institutional investors with renewed interest in blockchain assets.
  • The successful launch of the stablecoin would put pressure on the dominance of Tether in this market.

A group of major world banks is working on a new stablecoin tied to G7 currencies. The plan is one of the biggest endeavors that traditional financial institutions have conducted to delve into blockchain-based assets.

Top Global Banks Turn To Blockchain Amid Trump-Era Crypto Revival

Bank of America, Citi, Deutsche Bank, Goldman Sachs, UBS, Barclays, BNP Paribas, MUFG, TD Bank and Santander are among the participating banks, per a Reuters report. The plan is to develop digital tokens that are fully pegged to major world currencies like the U.S. dollar, euro, yen and the pound.

This initiative follows an increase in demand for stablecoins. It is also part of an effort by traditional banks to find new roles in a financial environment that is now favorable to cryptocurrencies.

The banks said they want to examine whether blockchain-based assets could enhance competition and improve efficiency in global payments. They also emphasized that the effort will comply fully with regulations and best risk management practices. The move aligns with recent policy developments in the U.S., such as the CFTC stablecoin collateral initiative for derivatives.

Trading digital assets has come back into the limelight due to the pro-crypto policies of president Donald Trump. Financial institutions are now eager to integrate blockchain into structured systems following their former wary position about this technology. The action of these leading banks indicates their confidence that stablecoins can exist equally with fiat.

Tether’s Dominance of the Stablecoin Market Faces New Competition

Tether currently controls approximately one-third of the stablecoin market. It owns approximately $179 billion of all available stablecoins, according to data from CoinGecko.

The proposed bank-issued stablecoins can now become a regulated alternative with transparent reserves and institutional oversight. This could change how money moves in crypto and become more appealing to traditional investors.

The joint project also follows a similar move by nine European banks, including ING and UniCredit, which recently announced plans to launch a euro-backed stablecoin.

France’s Société Générale earlier this year became the first major bank to issue a dollar-backed token. Although adoption remains small with only about $30 million in circulation.

Bank-Backed Stablecoins Could End Circle and Tether’s Dominance

Cardano founder Charles Hoskinson reacted to the announcement of the stablecoins launch by these bank giants. According to him, the move would finally result in breaking the monopoly Circle and Tether hold over the sector.

A similar trend is already visible at the state level, with North Dakota set to issue its stablecoin, following Wyoming’s footsteps. This further highlights the expanding competition in the stablecoin landscape.

A successful launch of the G7-pegged stablecoin would make it the first multi-currency network by financial institutions. This asset would enable easy payment settlements across borders and interoperability of various financial systems worldwide.

It could also allow the completion of international trades at a quicker pace and reduce exposure to unstable cryptocurrencies. However, no launch date or technological structure has been disclosed by the banks involved yet.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Paul Adedoyin is a crypto journalist with 4+ years experience who provides timely news, in-depth research, and insightful content to inform and empower his audience. His works have been featured on sites such as CryptoMode, CryptoNewsFlash among others. He holds a degree in Geophysics from OAU, Nigeria. When he's not writing, he loves watching soccer and reading educative journals. He can be reached via [email protected]
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.