Major Banks Team Up to Explore Issuing Stablecoins Pegged to G7 Currencies

Big Banks Explore Issuing Stablecoins Pegged to G7 Currencies

A consortium of major global banks, including Bank of America, Citi, Goldman Sachs, Deutsche Bank, UBS and others, is exploring the development of stablecoins pegged to G7 fiat currencies. The project aims to issue digital assets on public blockchains, with each token backed 1:1 by the underlying fiat (e.g. U.S. dollar, euro, yen).

The move comes as financial institutions seek to bridge traditional banking and digital assets under a regulatory framework. The proposed stablecoins could offer liquidity, faster settlement, and reduced friction in cross-border payments — while maintaining compliance and risk controls.

Who’s Involved & What’s Proposed

Consortium Composition & Goals

Participants include large global names: Bank of America, Citi, Goldman Sachs, UBS, Deutsche Bank, Santander, Barclays, BNP Paribas, MUFG, TD Bank Group, and more. The banks intend to explore whether an industry-wide stablecoin offering could boost competition in digital assets while satisfying regulatory rigor.

Technical & Regulatory Design

• 1:1 backing: Each stablecoin would be fully collateralized by fiat or high–quality reserves to ensure stability.
• Public blockchain deployment: The project aims to run these tokens on open blockchain networks, not closed or permissioned ledgers.
• Regulatory compliance & risk management: A stated priority is ensuring transparency, auditability, and alignment with regulatory expectations.

France’s Société Générale has already tested the waters: its digital-asset arm launched a dollar-backed stablecoin earlier in 2025, though its uptake has remained limited.

Significance & Potential Impacts

Challenging the Status Quo in Stablecoins

The stablecoin space is currently dominated by privately run tokens (e.g. Tether, USDC). A bank-led stablecoin backed by trusted institutions could shift trust dynamics and attract institutional users wary of decentralized counterparts.

Enhanced Payment & Settlement Efficiencies

With banks combining capital, reach, and trust, such stablecoins could reduce costs and delays in cross-border payments, settlement, and liquidity management.

Regulatory & Competitive Benefits

• By working together, large banks may better align stablecoin design with regulatory expectations (for anti-money laundering, reserve audits, disclosure)
• The consortium model could deter fragmentation (many competing tokens) and help standardize infrastructure

Risks & Challenges Ahead

• Regulatory hurdles: National and international laws on digital assets differ widely; compliance will be a major friction point
• Reserve transparency & audit issues: Full backing claims must be verifiable to maintain credibility
• Competition with existing stablecoins: Incumbents may push back or adapt aggressively
• Technical & adoption risks: Ensuring network security, scalability, and usage traction will be challenging

What to Watch Going Forward

• Regulatory feedback: How U.S., EU, and other jurisdictions react to bank-issued stablecoins
• Prototype launches & pilots: Initial versions or test tokens may come out as proofs of concept
• Adoption banking clients & platforms: Whether banks integrate stablecoins into payments, clearing, custodian services
• Interoperability & cross-chain links: Whether these stablecoins can seamlessly connect with DeFi, exchanges, and wallets
• Competing initiatives: Other bank groups or consortia (e.g. European banks issuing euro-pegged coins)

Final Word

Major global banks are now actively exploring issuing stablecoins pegged to G7 currencies, a bold step that could reshape how fiat and digital money intersect. While technical, legal, and competitive challenges abound, the initiative blends the credibility of legacy banks with the promise of blockchain-based money.

At its core: leading banks are working together to build trusted, regulated stablecoins backed by real fiat, a potential turning point in the evolution of digital finance.