The news: A consortium of international banks are exploring whether to create a stablecoin-esque digital currency to facilitate payments on-chain across G7 countries, per a press release.
The group includes Goldman Sachs, Deutsche Bank, Bank of America, Barclays, Banco Santander, BNP Paribas, Citigroup, MUFG Bank, TD Bank, and UBS Group.
How we got here: Regulatory clarity has emerged on both sides of the Atlantic for crypto after MiCA in the EU and then the GENIUS Act in the US became law.
In light of those regulations, banks and other financial institutions have joined cryptocurrency companies in rolling out their own stablecoins, such as Fiserv’s FIUSD, Stripe’s latest Open Issuance platform, and North Dakota’s Roughrider Coin.
Why this matters: So far, stablecoins have been designed to mirror a singular fiat currency. If the international consortium manages to create a stablecoin-like token that’s connected to multiple currencies, it would mark a first for a supranational cryptocurrency pegged to multiple fiats.
A multicurrency token may also help incumbents compete against private stablecoin companies like Tether and Circle, which are commanding substantial volume: USDC in circulation grew 90% YoY to $61.3 billion in its maiden earnings report.
With their own global stablecoin, these banks can convince institutional clients to reap the benefits of crypto—reducing cost and increasing speed of transactions—without defecting to a fintech provider.
Our take: Engineering a stablecoin-like digital currency that’s pegged to multiple currencies is a big task for the global banks logistically. These efforts also demonstrate that banks are taking the risk of payment disintermediation seriously—and, in the process, legitimizing stablecoin’s place in the payments ecosystem.
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