A coalition of 21 financial institutions, including Goldman Sachs, Bank of America, Citi and Deutsche Bank, announced on 1 September that it plans to establish a company to issue a US dollar stablecoin in the first half of 2027. The group, which began with ten banks in October 2025, also intends to explore other G7 currencies, with the euro a priority.
The proposed stablecoin is intended to operate on public blockchains, bringing bank-issued money into a market currently dominated by Tether and Circle. It is a significant development for the banking industry, but the commercial question is whether the new infrastructure will make payments more competitive or preserve existing banking relationships on faster technology.
European Central Bank President Christine Lagarde has expressed concern about the risks privately issued stablecoins may pose to monetary policy and financial stability. Her position provides a counterweight to the enthusiasm surrounding faster settlement and lower costs, particularly as banks and regulators consider how digital money should operate within the financial system.
The challenge is also one of distribution. Atul Khekade, co-founder of XDC Network, recently described the next stage of blockchain adoption with the phrase, “Product Is King, Distribution Is God”. Banks already possess substantial distribution through their customers, treasury relationships and payment networks. The question is whether they will use that advantage to create genuinely interoperable payment systems.
Four experts examine what bank-issued stablecoins can offer, how they differ from tokenised deposits, and who is likely to benefit when money moves faster.
Joshua Kim: The opportunity is to connect banks with decentralised networks
Joshua Kim, CEO and Founder of DonaFi, a decentralised crowdfunding platform, believes banks have a substantial advantage in their existing customer relationships and compliance infrastructure. However, he argues that their success will depend on whether they allow digital money to move beyond their own systems.
“Banks have a huge advantage because they already have customers, deposits, compliance infrastructure and trust. They can make stablecoins feel like a natural extension of a bank account rather than a crypto product. Where it gets interesting is decentralised payments. USDT and USDC already move across public blockchain networks globally without needing every transaction to pass through traditional banking rails. Banks will struggle if their stablecoins only work inside closed ecosystems. The bigger opportunity is connecting bank-issued money with decentralised networks, so businesses get the regulatory comfort of a bank alongside the speed, reach and always-on nature of blockchain payments.”
For businesses, Kim says the practical difference between the various forms of digital money is where the funds can travel. A tokenised deposit remains closely connected to a particular bank, while a bank-issued stablecoin may have wider circulation. Existing stablecoins already operate across decentralised payment networks.
“Ultimately, businesses probably won’t care what the technology is called. They’ll care whether they can pay a supplier instantly, cheaply and safely. Whichever model delivers that with the least friction is going to have a strong advantage.”
Kim expects banks and payment providers to retain some of the initial savings because they are investing in the infrastructure. Competition, however, could eventually pass more of those benefits to businesses and consumers. He also points to the value of receiving money in minutes rather than days, reducing the capital tied up while payments are being processed.
The real test of adoption, he says, is whether stablecoins are being used for ordinary commercial activity rather than simply moving between crypto platforms.
“I’d look at what people are actually paying for. Huge blockchain transaction volumes sound impressive, but moving stablecoins between exchanges isn’t the same thing as building a new payments system. The real milestone is seeing sustained growth in things like supplier payments, payroll, remittances, subscriptions and everyday purchases. Decentralised payments become particularly interesting when users don’t even realize blockchain is involved. If a business pays an overseas supplier on a Sunday and the money arrives almost instantly, they probably don’t care which chain handled it. When stablecoins become invisible infrastructure behind normal commerce, that’s when adoption becomes much more meaningful.”
Chandler Fang: Competition will centre on interoperability and trust
Chandler Fang, co-founder of t54 Labs, which develops infrastructure for the agentic economy, sees room for new stablecoins that serve particular industries and applications. He points to banking services and AI-related payments as examples of use cases that may require different forms of digital money.
“For new stablecoins to compete with incumbents, it is important to make them very native to certain use cases that unleash more utility.”
Fang says businesses should consider the liability behind a digital asset as well as its ability to move between counterparties. A tokenised deposit represents money held at a specific bank, while a bank-issued stablecoin may circulate more broadly but still carries the issuer’s credit and compliance framework. Existing stablecoins have the advantage of established public networks and global counterparties.
“The practical question is therefore less about the token itself and more about reach. Can your supplier receive it, can it settle instantly, and can everyone redeem it easily into the currency they actually need?”
He expects the economic benefits to be shared unevenly at first. Banks and payment providers may improve margins by reducing correspondent banking, prefunding and reconciliation costs, while competition should eventually push savings towards customers. For larger businesses, the working-capital benefit may be more important than the transaction fee.
“Stablecoins don’t just reduce fees; they also free up capital that would otherwise sit idle for days. For large businesses, that working-capital benefit can matter even more than transaction fees. Eventually, customers will expect those efficiencies to show up in pricing.”
Fang believes the market may settle on a combination of regulated issuers and shared infrastructure rather than a complete replacement of banking. The question is whether different systems can communicate with one another.
“If every bank builds its own closed stablecoin network, we may end up recreating correspondent banking with faster technology underneath it. That would still be an improvement, but it wouldn’t fundamentally change the structure of finance. The bigger opportunity comes when these assets can interoperate across banks, public blockchains, fintechs and eventually AI agents. Then money becomes genuinely programmable and portable across institutions. I think the market will probably land somewhere in the middle: regulated issuers and banks providing trusted forms of digital money, with shared infrastructure connecting them. The real competition will be around interoperability, identity and trust.”
Patrick Vishy: Banks are protecting their existing business
Patrick Vishy, a behavioural finance educator at Nononsense.courses and host of The 10-Minute Contrarian, takes a more sceptical view of the banks’ motivations. He believes their principal advantage is their existing customer base, rather than any technological capability that established stablecoin issuers cannot provide.
“There’s really nothing they can offer that USDT and USDC can’t, it’s more about keeping everyone in-house amongst the huge networks they already have. Think their FX book, treasury desks, their correspondent networks, etc. There’s also a huge trust factor I think most people ignore. If this is going to be the way of things moving forward, customers would likely be much more comfortable with a native token than one run by a 3rd party.”
Vishy does not expect customers to receive the immediate financial benefits of faster settlement, although he believes competition may eventually change that. He sees bank-issued stablecoins primarily as a way for institutions to retain their relationships and existing revenue streams.
“The main get for the banks is simply not losing their customers and networks to a faster better system. Winning by simply not losing. That’s really the underlying theme behind all of this.”
He also questions whether blockchain transaction figures can provide reliable evidence of commercial adoption. In his view, traditional business records will be necessary to distinguish genuine payments from trading activity.
“Early on at least, you’re going to have to measure it by more old-school Web2 receipts like payroll, purchase orders, supplier payouts, etc. There’s no way you could do this on the blockchain alone, there are too many bots slinging coins back and forth on exchanges to ever get an accurate number here.”
Vishy expects competition to emerge more strongly in the products built on top of the new infrastructure than in the infrastructure itself. Banks, he suggests, are likely to preserve much of their existing position while adopting technology that prevents customers from moving elsewhere.
Wesley Rios: The difficult work is making payments usable
Wesley Rios, US and LATAM Partnership Lead at Morph, has more than 15 years of experience in fintech, banking and payments, including roles at Mastercard. He argues that banks’ institutional credibility gives them a clear advantage with corporate customers, but that issuing a stablecoin is only the beginning of the work required to make it useful.
“The biggest advantage banks have is not necessarily the technology; it is institutional trust, regulatory familiarity and existing relationships with corporate customers. Enterprise money follows regulated counterparties. If a systemically important bank is the issuer or custodian, the risk conversation inside a large company becomes much easier. Banks already have the compliance infrastructure, treasury relationships and institutional distribution that businesses rely on.”
Rios says the unresolved issues are practical: local liquidity, conversion into ordinary currency, integration with corporate accounting systems, auditability, and processes for refunds and disputes. A business may be able to transfer a token quickly, but that does not necessarily mean the payment can be received, accounted for and reconciled without difficulty.
“Treasurers are not necessarily rejecting stablecoins because they dislike blockchain; they are rejecting them because month-end close, accounting and operational controls still have to work. So the banks have a distribution and trust advantage, but they will have to prove they can deliver a better payment experience rather than simply put the existing banking system onchain.”
The distinction between a tokenised deposit and a stablecoin is particularly important for corporate payments. Rios explains that a tokenised deposit remains a claim on a specific bank, while a bank-issued stablecoin is generally designed to circulate more freely. Existing stablecoins have already established networks of exchanges, wallets and counterparties, although they may not offer the same institutional comfort to a corporate risk committee.
“The businesses that actually benefit are the ones who stop prefunding nostro accounts in eight different markets to guarantee delivery—that released working capital dwarfs whatever basis points get saved on the transfer itself. Which instrument gets you there depends on whether your counterparty is inside your bank’s walled garden or out in the open market. Right now, most of them are out in the open market.”
Rios also distinguishes between stablecoins being held as a form of dollar savings and stablecoins being used for payments. In Latin America, he says, demand has historically included people converting local currency into dollar stablecoins to protect savings against inflation. That is a genuine use case, but it is not necessarily evidence of commercial payment adoption.
“The more meaningful signal is when the balance starts moving through the real economy. You want to see businesses paying suppliers, running payroll, receiving payments from customers and tourists, and settling recurring commercial invoices in stablecoins. You also want to see stablecoins connecting into local payment infrastructure rather than simply circulating between exchanges and crypto wallets.”
For Rios, the banks’ entry will only change the structure of payments if it removes the operational friction rather than transferring it to a new system.
“The alternative requires them to actually remove the friction, not relocate it: real local off-ramps, liquidity that doesn’t need three days’ notice, ERP integration that doesn’t require a finance team to reconcile by hand, accounting treatment that’s settled rather than argued over case by case, and a workable answer for refunds and disputes, since finality is a feature for settlement and a liability for commerce.”
The test is what happens after the transfer
The four contributors agree that faster settlement alone is insufficient to establish a successful payment system. Banks bring customers, regulatory infrastructure and institutional trust, while existing stablecoin networks offer established reach and the ability to move value across public blockchains. The commercial outcome will depend on whether those strengths can be combined without recreating the restrictions of the current system.
The more meaningful measures will be repeat supplier payments, payroll, merchant transactions and remittances, alongside evidence that businesses can reduce prefunding and reconcile payments efficiently. If banks retain the savings and keep their networks closed, stablecoins may become another layer of existing financial infrastructure. If interoperability and competition improve the customer experience, they could change the economics of cross-border payments.
The bank consortium’s proposed launch in 2027 will provide an important test of which direction the market takes.
