Global Banks Test Blockchain-Based Stablecoins
A group of major banks is testing blockchain stablecoins pegged to G7 currencies. The consortium includes Bank of America, Citi, Deutsche Bank, Goldman Sachs, UBS, Santander, and BNP Paribas. They announced the project on Friday.
The initiative aims to explore issuing digital assets on public blockchains. These stablecoins will be fully compliant and backed by institutions. The goal is to improve cross-border settlements, liquidity management, and market competition.
The project is in its early stages. It seeks to determine if digital money can meet regulatory and risk management standards while increasing efficiency.
Stablecoin Market and Institutional Interest
Currently, Tether (USDT) dominates the stablecoin market. It controls about $179 billion of the $310 billion in circulation, according to DeFiLlama data. Traditional banks have had limited success, with only Societe Generale issuing a dollar-backed stablecoin worth $30.6 million.
This new effort shows growing cooperation between banks and blockchain technology. Central banks are also considering digital assets for their reserves. Deutsche Bank’s recent report, “Gold’s Reign, Bitcoin’s Rise,” highlights this trend.
Central Banks and Digital Asset Reserves
- Deutsche Bank research suggests central banks may add Bitcoin and gold to reserves by 2030.
- This would reduce reliance on the U.S. dollar as the main reserve currency.
- The report notes Bitcoin’s lower volatility and rising institutional demand.
- Bitcoin is seen as a digital-age equivalent to gold.
Deutsche Bank is both developing G7-backed stablecoins and promoting Bitcoin as a reserve asset. This shows how banks are balancing liquidity management with value preservation. The line between traditional reserves and crypto is becoming less distinct.
Read more on this topic at Bloomberg and Deutsche Bank Research.
