The news: A global consortium of 21 banks will form a new company to issue a stablecoin for wholesale, institutional, and retail markets, per a press release.

Affiliated banks include Wells Fargo, Bank of America, Capital One, Citi, Goldman Sachs, PNC, TD Bank, Scotiabank, Banco Santander, BBVA, and Lloyds.

The stablecoin solution is set to launch next year.

How we got here: Legacy providers are trying to make inroads in a market that has doubled in size in just three years. 

The top two stablecoin issuers, Tether and Circle, account for the lion’s share of the stablecoin market, at more than $250 billion, per CoinMarketCap.com.

By creating consortiums, incumbents can combine their financial heft to kick-start acceptance and adoption. 

• Visa, Mastercard, Stripe, and others launched Open USD in June.
• And Early Warning Service’s Zelle is developing a stablecoin for remittances.

Implications for stablecoin providers: Stablecoins are only just beginning to push into payment use cases like remittances: Just 0.7% of stablecoins are being used for payment transaction volume, per the Kansas City Fed. Despite its tiny payments footprint, legacy institutions are building the infrastructure to avoid disintermediation. 

While stablecoin networks are in early development, providers need to focus on selling the value proposition of on-chain solutions to clients. 

Emphasizing 24/7 availability, reduced fees, and programmable payments could convince more enterprises to take a chance on new tech to improve their payments.

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