A number of major global banks have formed a consortium to explore issuing “a 1:1 reserve-backed form of digital money that provides a stable payment asset available on public blockchains,” according to a press release on Friday.
The group includes Banco Santander (SAN), Bank of America (NYSE:BAC), Barclays (BCS), BNP Paribas (OTCQX:BNPQF) (OTCQX:BNPQY), Citigroup (NYSE:C), Deutsche Bank (DB), Goldman Sachs (NYSE:GS), MUFG Bank Ltd, TD Bank Group (TD) and UBS Group (UBS). The lenders are said to be in contact with regulators and supervisors in relevant markets.
The goal of the new initiative is to assess if a new industry-wide offering “could bring the benefits of digital assets and enhance competition across the market, while ensuring full compliance with regulatory requirements and best practice risk management,” the banks said.
The move marks the latest effort by traditional financial institutions to explore how blockchaintechnology can be used to enhance payments, and recent passed legislation like the stablecoin-focused GENIUS Act prompted them to increase their focus on this new form of money. Earlier in the week, U.S. Bank (USB) said it was tapped to serve as the custodian for reserves backing crypto-native lender Anchorage Digital Bank’s payment-optimized stablecoins.
A payment stablecoin is a type of cryptocurrency for everyday transactions, holding a steady value by being fully backed by safe, liquid assets such as fiat cash or government debt.