Major Banks Join Forces to Develop G7-Backed Stablecoin Framework Amid Global Push for Digital Money Regulation

Wall Street and European Banking Giants Explore 1:1 Reserve-Backed Stablecoin Model on Public Blockchains

TL;DR:

• Bank of America, Goldman Sachs, Deutsche Bank, Citi, and others are collaborating on a stablecoin initiative tied to G7 currencies.
• The effort focuses on regulatory compliance, 1:1 reserve backing, and interoperability with public blockchains.
• The project reflects growing institutional interest in regulated stablecoins as U.S. and European frameworks solidify.

A coalition of major global banks—including Bank of America, Goldman Sachs, Deutsche Bank, Citi, UBS, Barclays, BNP Paribas, TD Bank, MUFG, and Santander—has confirmed an exploratory initiative to issue fully-backed digital money linked to G7 currencies. The consortium aims to determine whether a standardized, industry-wide stablecoin infrastructure could improve settlement efficiency and competitiveness across global markets while adhering to strict regulatory and risk-management frameworks. The announcement, published on October 10, 2025, describes the effort as an exploratory stage rather than a formal launch, but it marks a significant escalation in the traditional banking sector’s engagement with blockchain technology.

The group said the project intends to leverage public blockchains, signaling a departure from the closed-system tokenization pilots previously favored by large financial institutions. The banks emphasized that any potential token would maintain full reserve backing—pegged one-to-one to fiat currency—and would meet evolving global regulatory standards. According to their joint statement, the objective is to assess whether a compliant, transparent digital money offering can merge the benefits of blockchain innovation with the safeguards expected of regulated banking entities.

Regulators have been briefed on the initiative, and several participants noted that conversations are underway with supervisory bodies in key jurisdictions. The banks also acknowledged that no firm timeline has been set, reflecting a cautious, compliance-first approach. Market observers see this as an early move toward bridging traditional finance and decentralized systems, particularly as global stablecoin legislation gains traction. The United States’ new GENIUS Act, signed into law in July 2025, provides the first comprehensive framework for payment stablecoins but is not expected to take full effect until at least 15 months after Treasury and Federal Reserve implementation. The legislation aims to establish consistent oversight while preventing market concentration among either big tech or banking incumbents.

Financial experts are already dissecting the implications. Multicoin Capital’s Tushar Jain warned that regulated, yield-producing stablecoins could attract deposits away from traditional banks, while Circle’s Dante Disparte countered that the GENIUS Act’s structure prevents either side from monopolizing issuance. Despite such debates, institutional appetite is clearly accelerating. Dollar-pegged stablecoins now account for roughly $290 billion in circulating supply, with Tether alone representing around $178 billion. The consortium’s ambition suggests that banks intend to capture part of this rapidly growing market by introducing fiat-backed alternatives with greater transparency and compliance guarantees.

The initiative extends beyond U.S. borders. A parallel effort by nine European banks—including ING, UniCredit, and CaixaBank—seeks to issue a euro-denominated stablecoin under the European Union’s MiCA regulation by mid-2026. That project targets near-instant, programmable payments and aims to position Europe as a credible counterweight to the U.S.-dominated stablecoin landscape. At present, euro-pegged stablecoins represent only about $620 million of global market value, underscoring the dominance of the dollar in digital money circulation.

Societe Generale has already tested the waters through its SG-FORGE division, which recently launched a dollar-backed stablecoin on Ethereum and Solana following limited uptake of its earlier euro token—then valued at just €41.8 million. The broader consortium appears to be drawing on such precedents, envisioning an interoperable model that could eventually support multiple currencies. Industry analysts believe that a bank-backed, cross-jurisdictional stablecoin standard could reduce settlement friction, enable 24/7 payment flows, and provide an institutional alternative to crypto-native issuers that currently dominate the market.

Executives involved stressed that the exploration remains ongoing and that regulators will continue to be updated as the project evolves. Still, the symbolism is hard to ignore: some of the world’s largest banks—long viewed as cautious or resistant to decentralized finance—are now actively building toward public blockchain integration. Whether this results in a unified, compliant global stablecoin framework or simply a new layer of competition remains uncertain, but it signals a decisive step in traditional finance’s attempt to claim a stake in the digital-money future.

This article has been refined and enhanced by ChatGPT.