On October 10, 2025, a coalition of ten of the world’s largest banks—including Bank of America, Deutsche Bank, Goldman Sachs, UBS, Citi, MUFG, Barclays, TD Bank, Santander, and BNP Paribas—unveiled a bold initiative: the exploration of a stablecoin pegged 1:1 to G7 currencies, issued on public blockchains. This move, announced in a joint statement, marks a significant step by traditional finance to adapt to the rapidly evolving digital asset landscape.
The group, spanning lenders from the United States, United Kingdom, Switzerland, Japan, and Canada, is seeking to determine whether a new industry-wide digital currency could deliver the benefits of blockchain technology while ensuring robust regulatory compliance and risk management. As the banks themselves stated, “The objective of the initiative is to explore whether a new industry-wide offering could bring the benefits of digital assets and enhance competition across the market, while ensuring full compliance with regulatory requirements and best practice risk management.”
This announcement follows a surge of interest in stablecoins, fueled by the recent rally in cryptocurrency prices and explicit support for the sector from U.S. President Donald Trump. According to Reuters, the renewed enthusiasm has prompted many financial institutions to revisit the potential of blockchain applications in mainstream banking, beyond the speculative fervor that has long characterized the crypto sector.
Stablecoins, by definition, are digital assets designed to maintain a stable value by being pegged to real-world currencies. The banks’ proposed stablecoin would be anchored to the currencies of the G7—an elite group of advanced economies—aiming to provide a trustworthy and regulated alternative to existing digital currencies. Yet, as promising as this sounds, the project remains in its infancy. The banks have emphasized that they are merely exploring the feasibility of such a venture, rather than committing to a full-scale launch.
Behind this cautious approach lies a host of regulatory concerns. Financial stability authorities and central banks have repeatedly expressed unease about the risks posed by privately issued stablecoins. Bank of England Governor Andrew Bailey, for instance, has warned UK banks against launching their own stablecoins, highlighting the potential for these digital assets to facilitate the movement of funds outside regulated banking systems. Likewise, European Central Bank President Christine Lagarde stated in June that privately issued stablecoins pose risks for both monetary policy and broader financial stability.
These anxieties are not unfounded. As reported by BCG earlier this year, nearly 90% of stablecoin transactions are currently related to crypto trading, with only 6% actually used for the payment of goods or services. This means that, despite their potential, stablecoins have yet to make a significant impact on everyday commerce or cross-border payments in the mainstream economy.
The stablecoin market itself is dominated by Tether, a company based in El Salvador. According to CoinGecko, Tether accounts for $179 billion of the $310 billion worth of stablecoins in circulation as of 2025. This overwhelming market share highlights both the demand for stable digital assets and the lack of meaningful competition from traditional banks—at least, until now.
Not all banking players have been content to sit on the sidelines. France’s Societe Generale, for example, became the first major bank to issue a dollar-backed stablecoin through its digital asset subsidiary earlier this year. However, the adoption of this token has been modest, with just $30.6 million in circulation. This tepid response underscores the challenges banks face in breaking into a market already saturated with established crypto-native players.
Meanwhile, the race to innovate in the digital currency space is heating up in Europe. In September 2025, a rival consortium of nine European banks—including ING and UniCredit—announced the formation of a new company to launch a euro-denominated stablecoin. This move reflects a broader trend among European financial institutions to assert their relevance in an increasingly digital financial system, even as regulators remain wary.
Some bank executives, however, see the future of digital finance lying beyond stablecoins. Citi’s CEO remarked in July 2025 that “tokenised deposits were probably more important than a stablecoin.” Tokenisation refers to the creation of digital representations of traditional financial assets—such as deposits, stocks, and bonds—stored securely on a blockchain. The hope is that tokenisation could streamline settlement processes, reduce costs, and open up new avenues for innovation.
Despite the excitement, many tokenisation projects remain in the pilot phase. As noted by Reuters, progress has been slower than anticipated, with several initiatives failing to move beyond limited-scale trials as of 2024. The reasons are manifold: regulatory uncertainty, technological complexity, and the sheer inertia of established financial systems all play a role.
Still, the willingness of major banks to collaborate on a potential stablecoin signals a shift in attitudes. Where once traditional finance viewed cryptocurrencies and blockchain with suspicion—or even outright hostility—there is now a growing recognition that these technologies could offer real benefits if harnessed responsibly.
Yet, the path forward is anything but straightforward. Regulators are likely to scrutinize any new stablecoin offering with intense focus, wary of repeating the mistakes of the past. The collapse of unregulated crypto ventures, such as the infamous FTX exchange in 2022, has left scars on both investors and policymakers. As such, any bank-backed stablecoin will need to meet the highest standards of transparency, security, and compliance.
There is also the question of public adoption. While crypto enthusiasts may welcome a new stablecoin from established banks, ordinary consumers and businesses may be slower to embrace digital currencies for everyday transactions. The fact that only a small fraction of current stablecoin activity involves the payment of goods or services highlights the gap between technological potential and practical utility.
In the meantime, the banking consortium’s initiative stands as a testament to the sector’s determination to remain relevant in the digital age. Whether this project will ultimately lead to a widely adopted stablecoin—or simply pave the way for further experimentation with tokenised assets—remains to be seen. What is clear, however, is that the boundaries between traditional finance and the world of digital assets are becoming increasingly blurred.
As the world watches, the outcome of this experiment could reshape the future of money, payments, and banking itself.
