Some of the largest banks in the United States, including JPMorgan Chase, Bank of America, Citigroup and Wells Fargo, are reportedly working on a joint stabilecoin initiative, the Wall Street Journal reported May 23.
Sam Kazemian, founder of Frax Finance, confirmed The development, indicating that the conversations between large banks may have gone beyond speculation.
This movement marks an important shift as established institutions want to compete directly with crypto-native players. It also reflects a clear shift in how these traditional financial companies regard Stablecoins as a strategic necessity in the global economic system.
Stablecoins have received a considerable grip because of their role in supplying dollar-supported liquidity in the cryptomarket. They enable traders to cover themselves against volatility and offer users in emerging economies access to dollar-proofed assets.
The growing usefulness of these tokens, combined with increasing legislative attention in the US, makes them a priority for financial institutions that want to remain competitive.
Greg Waisman, Chief Operating Officer at Mercuryo, said CryptoSlate:
“The prospect of a consortium of leading US Banks Entering the cryptocurrency market with a joint stablecoin demonstrates how crypto native products may now be driving the evolution of financial markets. Stablecoins are a valuable Source of Digitalerenterte project Protocols. ”
How does this affect the Stablecoin market?
Two Giants, Tether’s USDT and Circle’s USDC, are currently dominating the Stablecoin market, which is currently worth $ 245.9 billion. Together they control 87% of the market.
However, the accession of large banks could dispute this dominance, especially in view of their enormous financial infrastructure and regulatory influence.
Paolo Ardoino, CEO of Tether, responded To the news with a short but targeted message on social media:
“Welcome Player 2.”
His comment suggests confidence in Tether as the market leader, which implies that traditional banks are only now overtaking what crypto-native companies have built up over the past decade.
Tether’s USDT remains the most traded Stablecoin worldwide, with market capitalization above $ 150 billion. The use of use includes cross -border payments, transfers and digital trade, especially in regions with limited access to the US dollar.
In the meantime, co-founder of Bitmex Arthur Hayes took a more critical picture, which suggests that the Stablecoin initiative of the banks could cause problems for Circle. He said:
“Day circle. Thanks for playing.”
Hayes’ remark means that Circle may struggle with the new competition layer of these settings.
This is when Circle investigates strategic options, including a potential public list or acquisition by companies such as Coinbase or Ripple.
