Having spent several years arguing that stablecoins were a systemic risk, the largest US banks have arrived at a different response: issue their own.
A group of major banks is progressing work on a jointly operated dollar token intended for interbank and commercial settlement, and the operator of the Zelle network has said it is examining stablecoin rails for cross-border payments. The vehicle in each case is a deposit token — a tokenized claim on a bank deposit rather than on a segregated pool of Treasuries.
The distinction matters more than it sounds. A deposit token stays on the bank''s balance sheet, remains eligible for deposit insurance within limits, and continues to fund lending. A payment stablecoin removes the balance from the banking system and parks it in government paper, which is safer for the holder and useless to a credit intermediary.
Federal stablecoin legislation forced the issue by giving nonbanks a clear path to issue regulated dollar tokens. Corporate treasurers who can hold an instant-settling dollar instrument have little reason to keep operating balances in a demand deposit account paying nothing.
Building a consortium instrument is slower than building a token. Governance, loss allocation and access rules have historically taken bank consortia years to negotiate.
The competitive clock is not waiting. Every quarter of design work is a quarter in which corporate balances learn to live somewhere else.