Since cryptocurrency’s inception, a major selling point was that it sidestepped the banking system. Now that President Donald Trump appears to be profiting off his memecoin, the major banks are considering launching their own —stablecoin, that is.
According to the Wall Street Journal, JPMorgan Chase (JPM-1.03%), Bank of America (BAC-1.24%), Citigroup (C-1.68%), Wells Fargo (WFC-0.86%), and other banking giants have been discussing a stablecoin crypto collaboration.
What is a stablecoin? They’re a type of crypto asset backed by cash, gold, bonds, or other regulated assets, pegged to fiat value, and are used by investors entering the market to convert their dollars. Stablecoins are a medium to trade for Bitcoin or other cryptocurrencies.
Last week, the Senate advanced the controversial GENIUS Act, which included restrictions on their issuance by non-financial companies (like tech), recent amendments for consumer protection safeguards, as well as ethics standards for government employees. It now awaits final passage (with some potential obstacles from Democrats).
Stablecoins could be a natural bridge between banks and crypto. Banks see them as a way to accelerate international payments. Crypto sees them as a step toward legitimacy, a way to be simultaneously inside and outside the banking system. Several crypto firms are applying for bank charters, according to an April report in the Wall Street Journal (NWSA-0.90%).
In addition to President Trump’s memecoin $TRUMP — a crypto asset pegged largely to jokes understood only by the extremely online crowd — the Trump family intends to launch its own stablecoin through its World Liberty Financial crypto company, the existence of which threatened the passage of the GENIUS Act.
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