JPMorgan and Wall Street Collaborate on Stablecoin to Compete with Tether

Wall Street Banks Collaborate on Stablecoin to Compete with Tether

A coalition of major U.S. banks—including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo—is reportedly working together on a new stablecoin project aimed at challenging Tether’s dominance in the crypto market. The initiative, still in its formative stage, is being developed in coordination with organizations like Early Warning Services (which operates Zelle) and The Clearing House.

The planned stablecoin would be pegged to the U.S. dollar and fully backed by cash or short-term government securities. Although initially limited to the founding banks, the network could eventually expand to include other financial institutions. Meanwhile, some regional and smaller banks are also exploring their own stablecoin ventures, though they face more significant hurdles.

This move comes as regulatory pressure mounts on existing stablecoins, with JPMorgan analysts recently criticizing Tether for lacking transparency and sufficient regulatory oversight. Tether has defended its practices, asserting its importance in servicing underbanked markets globally.

This emerging effort highlights the growing interest of traditional financial institutions in blockchain-based solutions and signals a potential reshaping of the stablecoin ecosystem as regulation and competition intensify.