Major US Banks Eyeing Stablecoin Initiatives

With the regulatory landscape in the United States shifting towards greater support for cryptocurrencies, prominent American banking institutions are taking concrete steps towards embracing this trend. Bank of America (BAC.N) and Citigroup (C.N) stand out as examples of banks actively exploring the launch of their own stablecoins.

Bank of America CEO Brian Moynihan announced that the bank is working on issuing a stablecoin, asserting that investors can anticipate moves from the bank in this direction. Although he did not provide a specific timeline, his statements reflect the bank's seriousness in exploring this area.

Stablecoins are a type of cryptocurrency designed to maintain a stable value, often pegged to fiat currencies like the US dollar. They are commonly used by cryptocurrency traders to transfer funds between different tokens.

Moynihan stated in a conference call with analysts, "We are also studying its size, because in some areas there is not a large flow of funds. So you will see that our company will take action in this regard." He noted that Bank of America is working to understand customer needs and that the stablecoin will be launched at the appropriate time, most likely in collaboration with other institutions.

Moynihan compared the bank's interest in stablecoins to the adoption of peer-to-peer digital payment platforms like Zelle and Venmo, suggesting that banks are seeking to adapt to changing consumer preferences.

Increasing Political and Regulatory Support

This trend is supported by promises from former US President Donald Trump to become a "crypto president," promoting its mainstream application in the United States. In addition, Congress is expected this week to push a series of laws that favor the cryptocurrency industry, paving the way for deeper integration of digital assets into traditional finance. The most notable of these laws is a bill to create a regulatory framework for stablecoins, which is expected to be submitted to Trump for signing and approval.

The latest news indicates that US Republican conservatives ended their two-day obstruction of the cryptocurrency bill, opening the way for the House of Representatives to vote on a series of measures supported by Trump. After facing pressure from Trump on Tuesday, they finally made concessions, and enough conservative legislators joined the Republicans to approve the procedural steps needed to begin reviewing the cryptocurrency bill, which includes stablecoin legislation passed by the Senate.

House Speaker Johnson stated that the leadership persuaded them to move forward with the stablecoin bill after ensuring that a ban on the Federal Reserve issuing a digital currency later this year would be added to the Defense Authorization Plan.

The House of Representatives also plans to vote on an industry-backed bill that would set broader market structure rules for cryptocurrencies. The stablecoin bill was approved in the Senate last month with broad bipartisan support, and if approved in the House of Representatives, it will be submitted to Trump for signing. The bill sets regulatory rules for dollar-backed stablecoins, including requiring companies to hold reserves equal to the value of the dollar.

Moynihan pointed out that banks are still awaiting clarity at the legal level, which explains the slow progress compared to some investors' expectations.

Morgan Stanley (MS.N) CFO Sharon Yeshaya reported on Wednesday that the bank is closely monitoring the development of stablecoins,

"We are studying the market environment, uses, and potential uses for our customers. But it is still too early, especially since the differences between our business and the business of our competitors, and how stablecoins will play a role in it, still need to be monitored."

Citibank CEO Jane Fraser also stated that Citi may issue a stablecoin to facilitate digital payments.

"We are studying issuing a Citi stablecoin," she told analysts at a Tuesday earnings conference call. "This is a good opportunity for us."

Although Jamie Dimon, CEO of JP Morgan (JPM.N), has always been publicly skeptical of Bitcoin, he stated on Tuesday that the bank will participate in the stablecoin business, but did not disclose the details.