- The GENIUS Act’s Senate approval signals growing regulatory support, potentially enabling banks to enter the stablecoin market.
- The initiative aims to launch stablecoins secured by real assets, contingent on regulatory clarity from the GENIUS Act’s progress in Congress.
Some top American banks are in favor of forming a partnership to develop and release stablecoins. Sources on this subject say this decision would bring these institutions and ventures directly against already established digital asset firms in the growing stablecoin industry.
JPMorgan, BofA, Citibank To Work With Stablecoins
According to reports, the ones leading the potential venture include JPMorgan Chase, Citibank, Bank of America and Wells Fargo. Many other major players in commercial banking are backing the effort, such as the Clearing House and Early Warning Services, the company that operates the Zelle payment network.
Even as the consortium is in its preliminary phase, it plans to release stablecoins secured with real assets. People inside the industry believe that demand from users and strong regulations will play a key role in the venture’s future. For now, the project is just speculation since American banking giant are still waiting for clear laws on stablecoins.
That objective is close to being achieved, judging from the good news coming from Capitol Hill lately. The Senate voted 66 to 32 this week, approving a step forward for the GENIUS Act, a proposal to oversee stablecoins. If the bill becomes law, it would give banks the legal foundation they need to take part in stablecoins.
Moreover, an increasing number of mainstream financial companies are becoming interested in stablecoins that maintain a 1:1 value with fiat currencies like the U.S. dollar. Institutions are drawn to them for how smoothly and low-cost they make online payments that cross country borders, where banks often take much longer and charge more.
Growing Trend Of Companies Foraying Into Stablecoins
The idea for a bank-backed stablecoin comes at a time when stablecoins are becoming more popular throughout the financial industry. Numerous alternative financial companies are already creating their own stablecoins. PayPal designed a token tied to the US dollar for its payment network. Furthermore, Ripple came up with its own version, known as Ripple USD (RLUSD), a MiCA-compliant asset, to make international transactions easier, as reported previously.
Some political and family businesses are now offering stablecoins too. World Liberty Financial, which is involved in the business interests of the U.S. President Donald Trump’s family, has launched its own USD1 stablecoin.
At the same time, U.S. governments and policy experts are beginning to focus on how such digital currencies can further the national economy. According to David Sacks, officials at the White House believe that stablecoins could create trillions of dollars in value for the U.S. Treasury.
In addition, the initiative points out that traditional banking and blockchain are becoming more similar. While digital asset companies apply for banking permits, JPMorgan and Standard Chartered keep discovering methods to grow their footprints in the blockchain field.
Credit: Source link
