Some of the largest banks and institutions in the world are working on a joint stablecoin.
21 bank such as Citi, HSBC, Goldman Sachs, Bank of America, Deutsche Bank, Commerzbank, Lloyds, Standard Bank, MUFG, and more are set to issue their own U.S. Dollar stablecoin.
They will look to form a joint company and commence operations in the first half of 2027.
Interestingly, there are a couple of non banks including Fidelity and Wisdom Tree. However, both have tokenized money market funds and their own versions of native stablecoins.
Although this spans institutions across various regions, only 2 are from the Middle East and Africa.
This follows on from regional banking groups and state banking associations in the U.S. announcing an initiative for both stablecoins and tokenized deposits.
U.S. Dollar vs. Local Currency Stablecoins
Many institutional and industry projects are focusing purely on U.S. Dollar stablecoins.
Critically, if stablecoins are to grow to accommodate for meaningful portions of today’s transfers across traditional finance, banking, payments, and settlements of securities and derivaties, they require deep liquidity for multiple currency stablecoin pairs.
At the moment, liquidity levels for Dollar to local currency stablecoins isn’t the best.
Especially for regular large institutional sums, the depth just isn’t there currently across Decentralized Exchanges (DEXs) and Centralized Exchanges (CEXs).
On the other side, 1:1 stablecoin swapping fees invoiced by industry providers and redemption fees put on by issuers can impact very large stablecoin coversions.
This is important because if large banks are able to issue their own stablecoins, in various currencies, they already have the demand, distribution, and FX routes to manage it well.
Other examples include Qivalis Euro stablecoin involving a European group of banks, as well as HKDAP stablecoin distributed by Standard Chartered. There is also a planned Swiss stablecoin rollout by some of the country’s top banks.
More of such initiatives are required across the top 20 currencies. And specifically across emerging markets.
