U.S. Banking Giants Pivot to Stablecoin Issuance to Protect Deposit Bases

U.S. banks are shifting from resistance to issuance in the stablecoin market, with more than ten major financial firms exploring a jointly issued dollar-pegged token. According to the Seoul Economic Daily, citing blockchain industry sources, the move marks a strategic pivot — institutions that once lobbied to slow stablecoin adoption are now racing to build their own settlement rails rather than watch payment volumes migrate to crypto-native issuers.

The Deposit Defense

The banks' entry is framed as a defensive response to deposit erosion. Community bank and credit union groups have cited Treasury Department estimates warning that as much as $6.6 trillion in deposits could exit the banking system if stablecoin rewards spread. In May, the American Bankers Association and 52 state banking associations petitioned the OCC for guidance on stablecoin interest and rewards rules. The calculus shifted as stablecoins moved beyond crypto trading into payments, remittances, and corporate treasury management — with Visa, BlackRock, and non-financial companies such as Google and DoorDash already active in the space.

Bank of America, Wells Fargo, and Santander are among the firms weighing a joint launch, starting with a dollar-pegged coin before expanding to G7 currencies. JPMorgan Chase has reviewed the possibility of issuing its own stablecoin but has indicated no formal plans.

Institutional Rails and Liquidity Fragmentation

The institutional push extends beyond coin issuance. Bankers associations across 39 U.S. states have formed the BankChain Alliance, representing 3,283 banks with combined assets of $21.8 trillion, to build a blockchain network targeted for a 2027 launch. The platform would support deposit tokens, stablecoin issuance, and smart contract-based settlement — an attempt to take direct control of payment infrastructure while preserving community lending functions.

For Tether and Circle, the competitive landscape is tightening. Ethereum-based stablecoins held 48.6% of the roughly $304 billion total stablecoin market capitalization, with Tron at 30.8%, according to DefiLlama — meaning approximately 80% of all stablecoins sit on those two networks. If bank-operated networks attract meaningful payment volumes, liquidity and transaction flow could scatter across multiple rails, diluting the dominance of any single chain.

What to Watch

The BankChain Alliance has stated its network will support interoperability with external blockchains, signaling an open-architecture approach rather than a walled garden. Circle, meanwhile, has expanded USDC, EURC, CCTP, and Bridge Kit to Plasma — an EVM-compatible Layer 1 built for stablecoin payments and remittances. The practical question for treasury teams and payment operators is not whether bank-issued stablecoins will reach market, but how quickly they will connect to existing merchant acquisition rails and cross-border settlement corridors.