Buoyed by a pro-crypto regulatory environment in 2025, major U.S. banks are planning to launch their own stablecoins, capitalizing on the GENIUS Act’s passage on July 17, 2025. The legislation, which establishes a federal framework for dollar-pegged stablecoins, has spurred institutions like JPMorgan Chase and Bank of America to explore issuing stablecoins or tokenized deposits, such as JPMD, to compete in the $260 billion stablecoin market.
This development, driven by relaxed regulations under President Donald Trump’s administration, could transform payments and boost markets for tokenized assets.
JPMorgan Chase’s JPMD, issued on Coinbase’s Base blockchain, targets institutional clients with 24/7 settlement and interest payments, integrating stablecoin functionality with traditional banking. Bank of America’s CEO, Brian Moynihan, confirmed at a 2025 Morgan Stanley conference that the bank is exploring stablecoin issuance to enhance payment efficiency.
The GENIUS Act mandates that issuers hold liquid reserves in cash or Treasuries, ensuring stability, and requires monthly disclosures to protect consumers. This framework, overseen by the Federal Reserve and Office of the Comptroller of the Currency (OCC) for large issuers, lowers barriers for banks entering the market.
The crypto industry’s $250 million investment in the 2024 elections helped secure a pro-crypto Congress, enabling bills like the Clarity Act and Anti-CBDC Surveillance State Act. These laws prioritize private-sector stablecoins over CBDCs, aligning with Trump’s executive order banning government-backed digital currencies.
Treasury Secretary Scott Bessent predicts the U.S. stablecoin market could reach $2 trillion by 2028, driven by bank participation. This could increase demand for Treasuries, as issuers build reserves, potentially impacting the yield curve, per Bank of America’s analysis.
Critics, including Sen. Jeff Merkley, warn that bank-issued stablecoins could destabilize financial systems if not properly regulated, citing risks of panic runs. The GENIUS Act’s bankruptcy provisions, which prioritize stablecoin holders’ claims, aim to mitigate these risks.
