Some of the biggest banking companies in the US are reportedly exploring a team-up to launch a crypto stablecoin.
Companies owned by JPMorgan, Bank of America, Citigroup and Wells Fargo have discussed the possibility of jointly issuing a stablecoin, The Wall Street Journal reported on May 22, citing people familiar with the matter.
Other financial institutions linked to the potential stablecoin include Early Warning Services, the parent company of digital payments network Zelle, and the payment network Clearing House.
The discussions are still in the early stages, and a final decision on the project could change depending on the regulatory environment and the demand for stablecoins.
A JPMorgan spokesperson told Cointelegraph the company had no comment. Bank of America, CitiGroup, and Wells Fargo did not immediately respond to requests for comment.
On May 20, the US Senate voted 66-32 in favor of advancing discussion on the stablecoin-regulating Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.
The bill outlines a regulatory framework for stablecoin collateralization and mandates compliance with Anti-Money Laundering laws. The bill is now headed to debate on the Senate floor.
Earlier this week, White House crypto czar David Sacks said he expects the bill will be passed and that it will receive bipartisan support.
However, high-ranking Democrats plan to amend the bill to include a clause prohibiting President Donald Trump and other US officials from profiting from stablecoins.
Trump and his family launched the crypto platform World Liberty Financial, which created the USD1 stablecoin in March. Critics argue that President Trump stands to personally benefit from passing favorable stablecoin regulation.
Related: World Liberty Financial brushes off oversight concerns from Congress
Stablecoin demand surges
The demand for stablecoins has been on the rise, with nation states adopting and institutions wanting to incorporate stablecoins.
The total market capitalization of stablecoins has shot up to $245 billion from $205 billion at the start of the year, representing a 20% increase.
Earlier this week, it was reported that yield-bearing stablecoins now account for nearly 4.5% of the entire stablecoin market, with a circulating supply of $11 billion.
Austin Campbell, a New York University professor and founder of Zero Knowledge Consulting, said the American banking lobby is “panicking,” as stablecoins can disrupt the traditional banking business model.
Earlier this month, it was reported that tech giant Meta is exploring ways to incorporate stablecoin payments into its platforms.
Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight