Exploration of Collaborative Stablecoin by American Banks - According to a recent report
In a significant shift towards digital innovation, major banks like JPMorgan Chase and Citigroup are exploring the use of stablecoins to revolutionize cross-border payments. This development comes as regulatory advancements, such as the recently enacted GENIUS Act, provide a federal framework for payment stablecoins in the U.S.
JPMorgan Chase, for instance, has Kinexys for Digital Payments (formerly JPM Coin) for instant 24/7 cross-border payments to corporate clients and other financial institutions. Citigroup's stablecoin is already live in multiple markets as of late 2024. The banks are now discussing the formation of a stablecoin consortium akin to Zelle for interoperability across banks and borders, addressing a critical challenge for adoption.
Zelle, run by Early Warning Services, whose owners include Bank of America, Capital One, JP Morgan Chase, PNC Bank, Truist, U.S. Bank, and Wells Fargo, could potentially be a vehicle for this consortium. The Clearing House, owned by 22 banks including the same ones as Zelle but also BNY, Citi, Barclays, Deutsche Bank, HSBC, and Santander, is also positioning itself for cross-border payments initiatives.
Stablecoins offer substantial improvements over traditional cross-border payment systems in speed, cost, security, and availability. Tokenized cash is expected to reach a material inflection point in 2025. However, true scaling requires customers to hold funds in stablecoins rather than converting back to local fiat, which would impact banking liquidity and revenue models.
Regulatory progress is notable with the July 18, 2025 signing of the GENIUS Act into law, creating the first federal regulatory framework for payment stablecoins in the U.S. This legislation mandates licensing and oversight for stablecoin issuers and intermediaries, aiming to foster safe innovation and market confidence.
Various projects around the world are exploring the use of blockchain for interbank payments and cross-border payments, such as Project Agora, Regulated Settlement Network, Regulated Liability Network, and Commercial Bank Money Token (CBMT). Fnality, backed by 20 institutions, tokenizes central bank money for institutional payment usage and is live in the UK, working on going live in the U.S. Banks may consider backing the stablecoin with central bank reserves, which are considered superior to US Treasuries.
Notable participants in these initiatives include JP Morgan and Deutsche Bank, who are part of Partior, another tokenized cross-border payment network. Citi also has its Token Services for similar purposes. The future of this ecosystem depends on overcoming interoperability hurdles and shifts in customer adoption behavior.
References:
- Ledger Insights. (2025). Bank adoption of stablecoins, tokenized deposits, and DLT payments. Retrieved from https://ledgerinsights.com/bank-adoption-of-stablecoins-tokenized-deposits-and-dlt-payments/
- The Wall Street Journal. (2025). Banking consortia discuss creation of joint bank stablecoin. Retrieved from https://www.wsj.com/articles/banking-consortia-discuss-creation-of-joint-bank-stablecoin-11666764800
- Congress.gov. (2025). The Digital Commodity Exchange Act of 2025. Retrieved from https://www.congress.gov/bill/118th-congress/senate-bill/2998/text
- The Clearing House. (2025). About Us. Retrieved from https://www.theclearinghouse.org/about-us
- Early Warning Services. (2025). Zelle. Retrieved from https://www.zellepay.com/about-us
- Major banks like JPMorgan Chase, Citigroup, and others are considering the formation of a stablecoin consortium, similar to Zelle, for interoperability across banks and borders.
- With the recent enactment of the GENIUS Act, a federal framework for payment stablecoins in the U.S. has been established, aiming to foster safe innovation and market confidence.
- The Clearing House, a bank-owned organization, is positioning itself for cross-border payments initiatives, joining projects such as Project Agora, Regulated Settlement Network, and Commercial Bank Money Token (CBMT).
- Stablecoins, such as JPMorgan Chase's Kinexys for Digital Payments (formerly JPM Coin) and Citigroup's stablecoin, are expected to offer substantial improvements over traditional cross-border payment systems in terms of speed, cost, security, and availability.
- Tokenized interbank payments and cross-border payments projects, like Fnality, Partior, and Citi's Token Services, are underway around the world, with the future of this ecosystem heavily dependent on overcoming interoperability hurdles and shifts in customer adoption behavior.
