Major U.S. Banks and Companies Explore Dollar-Backed Stablecoins After GENIUS Act
Major U.S. banks and corporations are eyeing dollar-backed stablecoins after the GENIUS Act established the first-ever U.S. federal framework for cryptocurrency tokens pegged to the dollar, as reported by Reuters.
On July 18, President Donald Trump signed the GENIUS Act into law, providing federal rules for stablecoins—cryptocurrency tokens pegged 1:1 to the U.S. dollar. Experts say this law could make stablecoins a standard method for payments and cross-border money transfers.
Stablecoins have grown rapidly in recent years, especially among traders moving funds between Bitcoin, Ethereum, and other digital assets. With near-instant settlement and lower transaction fees, stablecoins present an attractive alternative to traditional banking systems.
Companies Eye Stablecoin Strategies
A range of companies, including Amazon and Walmart, are reportedly exploring their own stablecoin initiatives. Firms must decide whether to create a new stablecoin or integrate existing tokens like Circle’s USDC.
“The intended use is going to matter a lot,” said Stephen Aschettino, a partner at Steptoe. “Is this something really designed to drive customers to engage with the issuer, or is the issuer’s primary motivation to have a stablecoin that is more ubiquitous?”
Compliance and Regulatory Challenges
Non-bank companies face anti-money laundering (AML) and know-your-customer (KYC) compliance under the GENIUS Act. “Those that already have robust KYC risk management and regulatory change management programs or working towards implementing these program elements may have a competitive advantage,” said Jill DeWitt, senior director of compliance and third-party risk management solutions at Moody’s.
U.S. banks are already experienced in risk management and customer verification, giving them a potential head start. Bank of America and Citigroup (C) are actively considering issuing stablecoins, while Morgan Stanley (MS) and JPMorgan Chase (JPM) are closely monitoring developments.
Banks must also consider the impact of holding stablecoins on liquidity and capital requirements, explained Julia Demidova, head of digital currencies at FIS. “The GENIUS Act is great, but if the bank is treating their stablecoin on the balance sheet under prudential banking regulation, you still need to look at the risk weight of the asset,” she said.
Blockchain Choice: Public vs. Private
Issuers must decide whether to use public blockchains like Ethereum or Solana, which offer transparency but less governance, or private permissioned blockchains, which provide stricter controls.
“The banks would desire and demand that very clear governance and structure,” Demidova said. “In that permissionless environment, you don’t have the governance and controls in place.”
“We’ve seen a tremendous amount of interest for existing blockchains that have seen user adoption, that have been battle tested at scale, including during activity spikes,” said Nassim Eddequiouaq, CEO of Bastion, a provider of infrastructure for companies to issue their own stablecoins.
Regulatory Rollout Will Be Gradual
Even though the GENIUS Act is law, its full implementation may take years. Federal regulators, including the Office of the Comptroller of the Currency (OCC), will issue rules covering risk management, compliance, and cross-border considerations, ensuring a phased rollout for stablecoin adoption.
“These things are going to have to phase in,” said Aschettino.
