America’s biggest banks, including JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and others, are in early discussions about creating a joint stablecoin to compete with the crypto industry, according to the Wall Street Journal, citing people familiar with the matter, on May 22.

The conversations reportedly involve bank-owned payment companies like Zelle operator Early Warning Services and the Clearing House.

The bank’s stablecoin ambitions are still in conceptual stages and dependent on upcoming stablecoin legislation and market demand, the report added.

EVERYONE WANTS A PIECE OF THE PIE.

JP MORGAN, WELLS FARGO, AND CITI BANK WANT TO LAUNCH THEIR OWN U.S. BANK-BACKED STABLECOIN.

THIS COULD BE GREAT FOR ADOPTION.

HORRIBLE FOR DECENTRALIZATION.

BUT CRYPTO ISNT GOING ANYWHERE. pic.twitter.com/XLBSKI45tm

Banks Playing Catchup

The report comes just days after key stablecoin legislation was moved along in US Congress. On May 20, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, passed in a Senate vote and now sets up the bill for floor debate.

American banks are growing concerned that under President Trump, stablecoins could become widely adopted and pose a threat to their deposits, transaction volume, and ultimately profits, especially if big tech companies enter the market.

In March, the Trump family’s DeFi platform World Liberty Financial said it would launch a stablecoin. The banks are now playing catch-up after crypto regulatory crackdowns two years ago.

They also see stablecoins as useful for speeding up routine transactions like cross-border payments, which currently take days through traditional systems.

“The possibility of Wall Street’s traditional powers teaming up to issue their own stablecoin marks the latest sign that mainstream and crypto finance are inching closer together,” the WSJ stated.

A Threat to Stablecoin Issuers?

BitMEX founder Arthur Hayes hinted that this could be the demise of crypto stablecoin issuers such as Circle.

Bye bye Circle. Thanks for playing. https://t.co/LmFPrv6KZK

However, in reality, it is unlikely that US banks will be able to compete with global stablecoins, which are available to everyone. This is because users will likely need a US bank account and all the restrictions that come with it to use their products.

Meanwhile, the crypto stablecoin market is currently worth $248 billion, which represents around 7% of the entire crypto market. Earlier this month, stablecoin liquidity reached a record high of $220 billion, reported CryptoPotato.

In early May, US Treasury researchers predicted that there could be an increase of more than 8x from the current stablecoin market cap, propelling it to about $2 trillion by 2028.