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Major U.S. Banks Explore Joint Stablecoin Initiative, WSJ Reports

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Several top U.S. banks, including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo, are reportedly in early discussions to jointly issue a stablecoin, according to a Wall Street Journal report published Thursday. The conversations are still preliminary and conceptual, sources told the newspaper.

Details of the Stablecoin Proposal

  • The effort involves entities co-owned by the banks, including The Clearing House and Early Warning Services.

  • One proposed structure could allow non-owner banks to also use the stablecoin, potentially expanding it into a broadly accepted digital settlement method within the financial industry.

  • The banks aim to explore whether a jointly issued dollar-backed stablecoin could enhance settlement efficiency, particularly for digital payments and interbank transfers.

  • Discussions also include the regulatory implications and technical infrastructure needed for a consortium-based coin.

Context and Market Implications

  • Stablecoins are cryptocurrencies pegged to fiat currencies (usually the U.S. dollar) and are primarily used to transfer value across crypto ecosystems quickly and with minimal volatility.

  • Currently, the U.S. stablecoin market is dominated by private players like Tether (USDT) and Circle (USDC). A move by traditional banks could challenge their dominance and legitimize digital dollar alternatives in regulated finance.

  • The initiative, if realized, would mark one of the most significant entries by traditional financial institutions into crypto infrastructure.

Political and Regulatory Backdrop

  • The report comes amid a shifting regulatory and political landscape in the U.S.:

    • Former President Donald Trump has positioned himself as a pro-crypto advocate, promising to become the “crypto president” and backing policies that promote blockchain innovation.

    • This contrasts with prior Democratic efforts to regulate or restrict aspects of crypto finance.

  • Regional banks are reportedly considering forming a separate consortium, highlighting the fragmented but growing interest in stablecoin issuance across the banking spectrum.

Responses and Next Steps

  • Citigroup, Bank of America, and Wells Fargo declined to comment.

  • JPMorgan did not respond to inquiries.

  • No official decisions have been made, and the project remains exploratory with potential changes in direction depending on regulatory feedback and internal priorities.

CFTC Commissioner Summer Mersinger to Lead Blockchain Association as New CEO

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Summer Mersinger, a commissioner at the U.S. Commodity Futures Trading Commission (CFTC), announced her resignation on Wednesday to become the new CEO of the Blockchain Association, a leading cryptocurrency lobbying group. Mersinger will officially assume the role on June 2, following the departure of current CEO Kristin Smith, who is joining the Solana Policy Institute.

Mersinger, a Republican appointee nominated by President Joe Biden in 2022, had been considered a contender for CFTC Chair before President Donald Trump selected former crypto executive Brian Quintenz to lead the agency earlier this year.

The Blockchain Association praised Mersinger’s experience and regulatory insight, calling her the “ideal leader to take the industry to new heights” as crypto lobbying efforts intensify in Washington.

“I’m excited to join the Blockchain Association at a time when digital asset policy is at a critical juncture,” Mersinger said in a brief statement.

Sarah Milby, the group’s current head of policy, will serve as interim CEO until the leadership handover is complete.

Timing and Political Context

Mersinger’s appointment comes as the crypto industry ramps up advocacy for comprehensive regulation, especially following last week’s Senate setback on stablecoin legislation. The bill, which aimed to establish a legal framework for dollar-pegged cryptocurrencies, failed to advance.

Meanwhile, President Trump, who has declared himself a “crypto president,” continues to align closely with the industry:

  • He has formed a federal cryptocurrency working group to explore regulatory approaches.

  • In March, he signed an executive order to establish a national bitcoin stockpile.

  • The Trump campaign is actively courting crypto-linked political contributions.

Industry Implications

Mersinger’s shift from regulator to industry advocate is emblematic of the revolving door between Washington and the crypto sector, and could bolster the Blockchain Association’s push for clearer digital asset laws in Congress.

Her deep understanding of the CFTC’s regulatory structure and jurisdiction over crypto derivatives markets will likely enhance the group’s influence amid ongoing turf battles between the SEC, CFTC, and Congress over who should regulate digital assets.

US Crypto Industry Presses for Day-One Executive Orders Under Trump

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The cryptocurrency industry is urging President-elect Donald Trump to prioritize his campaign promise of overhauling crypto policies by issuing executive orders as early as his first day in office on January 20. These potential directives aim to push cryptocurrency further into the mainstream, according to insiders.

Trump has signaled plans for a wave of executive orders on diverse topics, including immigration and energy. The crypto sector hopes this momentum will extend to their agenda, advocating for measures such as creating a strategic bitcoin reserve, guaranteeing banking access for crypto companies, and establishing a crypto industry council. Insiders suggest one such order may even be unveiled on Inauguration Day, with additional orders expected within the administration’s first 100 days.

“Given the tenor of the campaign, it would be imperative for executive orders to outline clear priorities and provide a roadmap,” said Rebecca Rettig, Chief Legal and Policy Officer at Polygon Labs.

Trump’s proposed approach marks a sharp departure from President Joe Biden’s administration, which implemented stringent regulations on the sector, citing concerns over crime and volatility. Trump, branding himself as a “crypto president,” has promised to reverse this stance. His transition team already includes pro-crypto figures such as SEC chair Paul Atkins and White House crypto advisor David Sacks.

In July, Trump unveiled plans to establish a U.S. bitcoin reserve, driving Bitcoin prices above $107,000. Although the cryptocurrency has since dropped below $100,000, the industry remains divided over whether Trump could use executive powers or would need Congress to implement such a reserve. A draft executive order by the Bitcoin Policy Institute proposes spending $21 billion over a year to designate Bitcoin as a strategic reserve asset.

Other anticipated executive actions include directives to prevent banks from excluding crypto firms from the traditional financial system, a longstanding industry grievance. While federal regulators assert that banks are free to work with compliant crypto firms, some executives argue that regulatory pressure has stifled such partnerships. However, analysts caution that executive orders may have limited impact on federal banking regulators, who operate independently.

Additionally, Trump has floated the idea of forming a crypto industry council, which his team is currently exploring. Previous administrations have successfully created similar councils through executive orders.

The broader crypto community is also pushing for an executive order that sets foundational principles for crypto regulation, akin to Trump’s 2017 directive for banking rule reviews. Such an order could encourage regulatory agencies to revisit existing rules to better align with the rapidly evolving cryptocurrency landscape.

“An early executive order articulating core principles for crypto regulation wouldn’t be surprising,” said Jonah Krane, a partner at financial firm Klaros Group. “It would signal the administration’s direction while initiating long-term regulatory adjustments.”