In a rare public embrace of the once-shunned world of crypto, the heads of America’s largest banks made one thing clear this week: stablecoins are no longer at the fringe of finance.
On earnings calls, JPMorgan’s Jamie Dimon, Bank of America’s Brian Moynihan and Citigroup’s Jane Fraser each described the upstart “digital dollar” as a potential threat to the banking industry’s grip on payments — and signaled they’re preparing to respond.
Unlike more volatile cryptocurrencies, stablecoins are designed to hold their value and settle payments instantly, around the clock. That simple functionality — fast, programmable dollars — has been drawing interest from companies and platforms that might otherwise rely on banks.
Now, senior bankers are previewing how they’ll defend their grip on one of banking’s most fundamental pillars — exploring tools like deposit tokens and bank-issued stablecoins.
“They’re trying to get into payment systems and rewards programs,” Dimon said, referring to fintech firms pushing into banking and payments. “We have to be cognizant of that.”
The comments come midway through “Crypto Week” in the US — so-named because of a series of votes on key crypto legislation, including a stablecoin bill that backers see promoting wider use of dollar-denominated digital tokens. A cohort of House Republicans on Wednesday dropped a two-day blockade on the bills, paving the way for House votes on the measures backed by President Donald Trump.
Stablecoins are a kind of cryptocurrency typically pegged one-to-one to the US dollar and backed by a basket of cash-like assets. Today, there are some $265 billion in circulation, according to CoinGecko data. Citigroup has forecast that the market could swell to as much as $3.7 trillion by 2030.
The banking industry must now respond, whether through building their own products or partnering with upstart payment outfits, Bank of America’s Moynihan said during the bank’s earnings call this week. The risk of inaction is that clients simply move on to new partners, he warned.
“We can move money efficiently and we have to be aware of the attack on the payment system, and we’ll be there to defend it,” Moynihan said. He added, however, that the bank isn’t seeing clients “knocking on our door and saying, please give me this right now.”
While Bank of America mulls its options, Citigroup and JPMorgan are forging ahead with blockchain initiatives, including their respective deposit tokens, which offer many of the same advantages as stablecoins but keep payments within the existing regulatory framework. Citigroup Chief Executive Officer Jane Fraser said the bank is actively exploring reserve management for stablecoins, on-and-off ramps between cash and tokens, providing custody for crypto assets and even issuing its own stablecoin. JPMorgan’s Dimon also said the bank would be involved in both deposit tokens and stablecoins.
“Digital assets are the next evolution in the broader digitization of payments, financing, liquidity,” Fraser said on the bank’s earnings call. “What our clients want is multi-asset, multi-bank, cross-border, always on solutions, provided in a safe and sound manner with as many of the complexities solved for them.”
Increasingly, stablecoin players are devising offerings that resemble banking products — albeit tailored for the crypto economy. Circle Internet Group Inc. works with distribution partners like crypto exchange Coinbase Global Inc. to offer consumers 4.1% rewards on their USDC balances. Earlier this year, Circle announced its own payments network with the goal of helping corporate clients settle cross-border transactions using stablecoins.
The big banks have a history of fending off such competition. When peer-to-peer money transfer service Venmo continued generating traction after it was acquired by PayPal Holdings Inc. as part of its 2013 Braintree acquisition, top lenders in the US banded together to form Zelle, a rival peer-to-peer service, via Early Warning Services LLC. Zelle moved more than $1 trillion in 2024.
PNC Financial Services Chief Executive William Demchak expects banks to take similarly defensive measures to create an industry-led stablecoin, he said during the company’s earnings call this week.
“For all the reasons why JPMorgan and Citi have done well in regular payments, the same will hold true in other types of payments,” said David Donovan, executive vice president at digital consulting firm Publicis Sapient. “It’s that gold backing of those banks.”
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