Top executives at major U.S. banks have publicly acknowledged that stablecoins are no longer a fringe financial tool. This week, during earnings calls, officials from JPMorgan, Bank of America, and Citigroup warned that stablecoins could disrupt the traditional banking system.
The comments came as lawmakers in Washington pushed forward new crypto legislation during what’s been dubbed “Crypto Week.” Stablecoins are digital tokens usually tied to the U.S. dollar and backed by assets like cash or Treasury bills.
Unlike regular cryptocurrencies, they don’t swing wildly in value. Instead, they offer fast, round-the-clock payments, which is something many businesses want. As a result of that, there has been a surge in interest from companies that once depended on banks for money transfers.
JPMorgan CEO Jamie Dimon said fintech firms are creeping into spaces once ruled by banks. “They’re trying to get into payment systems and rewards programs,” Dimon said. “We have to be cognizant of that.” He made it clear that banks must protect their role in handling payments.
Citigroup CEO Jane Fraser said the bank is already working on using blockchain technology to offer services like deposit tokens and its own stablecoin. She said Citi is looking into how to safely hold digital assets and also move money between tokens and cash. She also mentioned managing reserves for stablecoins.
“Digital assets are the next evolution in the broader digitization of payments, financing, liquidity,” she said. Meanwhile, Bank of America CEO Brian Moynihan said their clients are not yet asking for stablecoin services
However, he warned that banks must act before customers turn to other partners. “We can move money efficiently and we have to be aware of the attack on the payment system, and we’ll be there to defend it,” Moynihan said.
The conversation intensified this week as a stablecoin bill (GENIUS Act) got approved in the House of Representatives. House Republicans ended a two-day blockade, which allowed the bill to advance. Those who support the bill said it could make dollar-backed tokens more common and more regulated. Moreover, the bill is also backed by President Donald Trump.
Currently, around $265 billion in stablecoins are in use, according to CoinGecko. Citigroup estimates that figure could rise to $3.7 trillion by 2030. With numbers like that, banks are feeling the pressure.
Circle, the company behind USDC, now offers 4.1% rewards on balances and launched its own payment network earlier this year. Its goal is to help businesses move money across borders using stablecoins.
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