Faced with the uncontrolled rise of private stablecoins, global banking giants, from Goldman Sachs to Société Générale, are going on the offensive. By testing tokens backed by G7 currencies, these institutions intend to regain control of digital finance. This strategic project, led by the USDF consortium and the Provenance blockchain, aims to combine monetary stability, regulatory compliance and technological innovation. Such an initiative could redefine the balance between traditional banks, regulators and the crypto ecosystem.
In brief
- Several major global banks, including JPMorgan, Goldman Sachs and UBS, are launching a joint initiative around stablecoins.
- The project aims to create stable digital currencies, backed by G7 currencies, to modernize interbank payments.
- These stablecoins would be issued via public blockchains and backed by insured bank deposits.
- The initiative aims to comply with regulatory requirements, with reinforced governance and full traceability.
The big banks are taking a stand: towards standardization of institutional stablecoins?
As the dominance of stablecoins USDT and USDC drops to 83%, a group of major global banks is currently working on issuing stablecoins backed by currencies like the dollar, euro, pound sterling and yen.
This project is led by the USDF consortium, based in the United States, in partnership with the public blockchain network Provenance Blockchain. The objective is to “provide a compliant and interoperable institutional settlement solution that is backed by insured bank deposits” said Figure Technologies, one of the key players involved in the consortium.
The initiative aims to create a regulated alternative to stablecoins issued by non-bank entities. The key points of the project include:
- Backing G7 currencies via guaranteed bank deposits, which reinforces the stability of the tokens issued;
- Issuance via traditional banks such as JPMorgan, Goldman Sachs, UBS or Deutsche Bank offers increased institutional credibility;
- The use of public blockchains to ensure transparency and traceability of transactions;
- Strengthened regulatory compliance to meet the requirements of American and international financial authorities.
By positioning themselves on the stablecoin market, these institutions intend to regain control of a segment hitherto dominated by the crypto ecosystem. They also aim to reduce friction in cross-border settlements, while providing a more secure solution for institutional players.
Towards a redefinition of monetary flows?
If this initiative comes to fruition on a large scale, the consequences could be considerable, particularly for the banking systems of emerging countries. A recent study, carried out by Standard Chartered using on-chain data, warns of the risk that dollar-backed stablecoins represent for fragile economies: “up to $1 trillion could leave local banks over the next three years if these stablecoins become mainstream”according to the bank's analysts.
At the same time, JPMorgan estimates that the rise of these assets could generate additional demand of 1.4 trillion dollars for the greenback by 2027. This dynamic strengthens the hegemony of the dollar in the digital economy, to the detriment of other currencies.
Europe, for its part, is trying to react. Indeed, Eurozone finance ministers are already considering mechanisms to encourage the emergence of stablecoins denominated in euros, in order to counterbalance this American domination. In the longer term, the European Central Bank is working on a cap of €3,000 per individual to limit the systemic risks linked to the future digital euro.
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