An unprecedented phenomenon is occurring in the global financial market: American banks - which were once wary of cryptocurrencies - are now joining forces to develop a common stablecoin, expected to open the door for digital asset trading across the traditional banking system.
🚨 Shocking figures: Institutional capital is finding its way to blockchain
In just a few recent quarters, on-chain data shows that the volume of stablecoins issued by traditional financial institutions (TradFi) has increased by over 80%, with many testnet transactions confirmed by industry "stars" like JPMorgan, Citibank, Wells Fargo. According to Boston Consulting Group, in Q1/2024 alone, the stream of enterprise stablecoin solution tests has exceeded $10 billion – a figure reflecting the ambition to convert over $20,000 billion in assets from large banks' balance sheets into the blockchain space.
The TVL chart of bank stablecoin products continues to rise, regardless of crypto market volatility. This is an unprecedented shift in digital financial history, especially considering these institutions' original hesitation towards crypto.
🌐 The rise of inter-bank stablecoins
According to information from coin68.com, the alliance of major American banks is planning to deploy a joint Stablecoin. This system will allow transactions, transfers, and other financial activities to occur instantly, 24/7, without multiple intermediary layers. Technically, the inter-bank stablecoin will be a token backed by actual deposits at the Fed or periodically audited collateral assets, on a private or public blockchain like Ethereum, depending on the deployment scale.
Differences from traditional stablecoins
Unlike USDT and USDC, which primarily serve trading needs on DEX/CEX, inter-bank stablecoins aim to resolve immediate (atomic) settlements, reduce storage costs, and increase cash flow transparency. Notably: the incentive for banks is no longer small transaction fees, but the opportunity to control the next-generation global payment infrastructure.
"This is not just a foundational change, but a meta change."
🚀 Capital flow reversal: Why are banks choosing to go on-chain at this moment?
- Old meta: Retail stablecoins (USDT, USDC) mainly serve traders and DeFi, relying heavily on issuer trust and redemption capabilities.
- New meta: Institutional stablecoins open a narrative of transparent backing, real utility (B2B, cross-border payments, bulk transactions), supported by "too big to fail" banks.
- Societal context: Geopolitical tensions, high interest rates, and risks of traditional commercial banks evaporating are driving institutions to seek on-chain liquidity solutions and risk control.
- Degen behavior: On-chain investors monitor traditional whale addresses beginning to shift funds from USDC to JP Morgan's pilot products...
With bank-backed stablecoins, attention is strongly shifting from DeFi exchanges to institutional OTC channels. Risk management teams on Wall Street now must add an "On-chain Treasury" column to their internal dashboards.
⚠️ Counterargument questions & potential risks
Despite this attractive narrative, many questions remain open:
- Audit concerns: How transparent will banks be about backing assets for stablecoins?
- Concentration & censorship risks: Bank stablecoins could be easily KYC'd, blacklisted, contrary to DeFi's ethos.
- Repetition effect: History has witnessed many institutional stablecoin experiments (JPM Coin, Fnality, USC...) that didn't explode – Will this time be different?
There's still a possibility this is just a big fish "testing the net", not truly entering mainnet to compete fiercely with retail stablecoins, especially when not addressing global liquidity needs.
🔎 Long-term perspective: Wall Street's ambition to "internetize" currency
Despite risks, this event reveals a new macro-level awareness: Traditional financial institutions don't want to be outsiders in the blockchain era. Instead of confronting crypto stablecoins, they choose to build their own meta, leveraging scale and reputation advantages to protect payment market share and control the narrative.
In the future, bank stablecoins might become the back-end infrastructure for digital financial applications, used as "lubricant" for B2B products, or even a strategic bridge helping DeFi access large-scale institutional liquidity.
📊 Conclusion: Attention now belongs to new capital flows
Recent movements by US financial institutions show that when traditional narrative meets blockchain narrative, the consequence is not just "payment testnet-ization", but an unprecedented attention competition between retail and enterprise stablecoins.
A new flow of smart money is shifting, and attention, once again, proves to be the most valuable asset — regardless of which meta dominates the crypto market.
