Wall Street Giants Citigroup & JPMorgan Dive Into Stablecoins as GENIUS Act Nears Critical Vote

Traditional finance's sleeping giants just woke up—and they're holding stablecoins. Citigroup and JPMorgan confirmed today they're launching regulated dollar-pegged tokens, timed suspiciously close to the GENIUS Act's make-or-break congressional vote next week.

Why now? Because nothing motivates banks like regulatory tailwinds and the fear of missing out. The GENIUS Act promises clearer rules for blockchain-based payments—and suddenly every too-big-to-fail institution wants a seat at the crypto table.

JPMorgan's token will reportedly settle cross-border trades, while Citi's targets institutional custody. Both avoid mentioning they're years behind fintech upstarts—but hey, better late than never when there's profit to extract.

One cynical take? This reeks of 'if you can't beat 'em, regulate 'em.' Wall Street's playbook stays consistent: wait for startups to prove the market, then lobby for rules that favor incumbents. The GENIUS Act might just be their Trojan horse.

TLDR

• Citigroup is exploring launching its own stablecoin and providing custody solutions for digital assets
• JPMorgan is reluctantly entering the stablecoin market despite CEO Jamie Dimon’s reservations about the technology
• Citigroup predicts the stablecoin market will reach $3.7 trillion by 2030, driving bank interest
• Bank of America identifies four key sectors that could benefit from stablecoin adoption: Ethereum, traditional banks, payment companies, and e-commerce platforms
• The GENIUS Act heading for a House vote this week could establish regulatory framework for stablecoins

Two of America’s largest banks are making moves into the stablecoin sector as new legislation could reshape the digital payments landscape. Citigroup and JPMorgan are both exploring stablecoin offerings despite varying levels of enthusiasm from their leadership.

Citigroup CEO Jane Fraser announced her company is examining the possibility of launching its own stablecoin. The bank is also considering providing custody solutions and reserve management services for other digital tokens.

Fraser emphasized the importance of tokenized deposits in the bank’s strategy. “We are looking at the issuance of a Citi stablecoin, but probably most importantly is the tokenized deposit space, where we’re very active,” she stated.

The timing appears strategic for Citigroup. The bank’s stock recently reached its highest valuation since 2008, providing financial flexibility for new ventures.

Citigroup researchers published bullish predictions about stablecoins earlier this year. They forecast the market will grow to $3.7 trillion by 2030, representing massive expansion from current levels.

JPMorgan is taking a more cautious approach to the sector. CEO Jamie Dimon has expressed skepticism about stablecoins but acknowledges competitive pressures.

“We’re going to be involved in both JPMorgan deposit coin and stablecoins to understand it, to be good at it,” Dimon said during a recent earnings call. He admitted the bank must stay competitive as rivals develop payment systems and rewards programs.

Legislative Push Creates Momentum

The GENIUS Act is expected to reach a House vote this week. This legislation WOULD establish a regulatory framework for stablecoins, potentially encouraging broader adoption across traditional payment systems.

Washington lawmakers are focusing on digital assets during crypto Week. Industry observers expect stablecoins to benefit from the new legislative push supporting digital currencies.

Bank of America has identified four market sectors positioned to benefit from stablecoin growth. These include Ethereum, traditional banks, payment companies, and e-commerce platforms.

Key Beneficiaries of Stablecoin Adoption

Ethereum serves as the foundation for over half of existing stablecoins. The cryptocurrency enables programmable tokens and smart contracts that power stablecoin technology.

Traditional banks like JPMorgan and BNY are already making stablecoin investments. JPMorgan launched its tokenized deposit coin JPMD in June, operating on an Ethereum-based blockchain developed by Coinbase.

BNY partnered with Ripple on July 9 to serve as primary reserve custodian for the company’s US dollar stablecoin. This arrangement ensures reserves are held securely by a major global bank.

Payment companies including Visa, Mastercard, and PayPal have been developing stablecoin capabilities for years. Mastercard has built blockchain capabilities since 2015, while Visa settled its first transaction with Circle’s USD Coin in 2020.

PayPal launched its own stablecoin called PayPal USD in 2023. Mastercard announced an April partnership with Circle to enable stablecoin payments using USDC for crypto-to-fiat conversions.

E-commerce platforms like Shopify represent the fourth beneficiary sector. The platform has announced plans to roll out USDC payments in partnership with Circle and expand crypto checkout options.

Cross-border payments could become a prominent use case for stablecoins within the payments space. Shopify’s stablecoin features may allow merchants to connect more easily with global customers.

Bank of America estimates it could take three to five years to fully build infrastructure for widespread stablecoin adoption. However, friendly legislation and increased attention from traditional banks could accelerate this timeline.