Major Banks Explore the Potential of Stablecoins Amid Industry Shifts

Recent developments indicate that leading financial institutions are actively considering the issuance of their own stablecoins, signaling a significant shift in the banking landscape. As the digital currency ecosystem evolves, banks are evaluating how stablecoins could enhance their service offerings and maintain competitiveness in a rapidly changing financial environment.

Global Banking Giants Eye Stablecoin Integration

One prominent example is Banco Santander SA, a major player in the international banking sector, which is contemplating the expansion of its cryptocurrency-related services to retail customers. Early-stage plans include the potential launch of stablecoins pegged to major fiat currencies such as the US dollar and the euro. According to a Bloomberg report from May 29, these initiatives are still in preliminary phases, but they reflect a broader trend among traditional banks to explore digital assets.

In addition to Santander, other financial titans like JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo are reportedly assessing the feasibility of issuing their own stablecoins. This movement follows a notable regulatory shift in the United States during the Trump administration, which has opened the door for more innovative approaches to digital currency adoption within the banking sector.

Proponents argue that stablecoins could reinforce the US dollar’s dominance in global finance, facilitate smoother capital flows, and provide banking services to the unbanked population. Moreover, they could enable small and medium-sized enterprises to access international markets more efficiently, fostering economic growth and financial inclusion.

Related: UK FCA Seeks Public Feedback on Stablecoin and Crypto Custody Regulations

Divisions Within the Banking Industry Over Stablecoins

While some of the world’s largest banks are exploring stablecoin issuance, others remain cautious or outright oppose such initiatives. Concerns center around the potential erosion of traditional banking profits and the risk of market share loss to digital currencies. In the United States, banking lobbyists and certain lawmakers have actively sought to block legislation that would facilitate stablecoin development, fearing it could undermine the existing financial system.

For instance, US Senator Kirsten Gillibrand highlighted the potential impact of yield-bearing stablecoins, suggesting that their issuance might diminish the role of local banks in providing loans. During a speech at the DC Blockchain Summit in March 2025, she emphasized that households and small businesses rely heavily on traditional banks for credit, and that stablecoins offering yields could threaten this vital sector.

According to Professor Austin Campbell of New York University, the banking sector’s apprehension about yield-bearing stablecoins stems from their potential to disrupt the low-interest deposit model that underpins fractional reserve banking. Campbell criticizes recent legislative efforts aimed at restricting these stablecoins, arguing that such regulations primarily benefit billionaires and banking executives rather than the broader economy.

In a May 21 tweet, Campbell stated, “The only beneficiaries of restrictions on yield-bearing stablecoins are the ultra-wealthy and bank executives, not everyday consumers or small businesses.” This sentiment underscores the ongoing debate about the future role of stablecoins in the financial ecosystem.

As the industry continues to evolve, the debate over stablecoins’ regulatory framework and their potential to reshape banking remains intense. While some see them as a tool for financial innovation, others warn of the risks associated with their widespread adoption, including market instability and bank runs.

For further insights, see the recent article: Unstablecoins: Depegging, Bank Runs, and Emerging Risks.