In a seismic shift for the future of finance, ten of the world’s largest banks—including Bank of America, Citi, Deutsche Bank, Goldman Sachs, UBS, Banco Santander, Barclays, BNP Paribas, MUFG Bank, and TD Bank Group—have united to explore the issuance of a regulated stablecoin pegged to G7 currencies. Announced on October 10, 2025, this collaborative initiative signals a bold entry by traditional finance into the digital asset arena, aiming to streamline cross-border payments, unify capital markets clearing processes and dethrone Tether and USDC in a market projected to swell to $500 trillion.

The alliance arrives at a pivotal moment, coinciding with groundbreaking U.S. regulatory clarity from the GENIUS and CLARITY Acts. Together, these developments are poised to accelerate the on-chain migration of America’s $500 trillion securities and derivatives market, unlocking unprecedented efficiencies, bolstering USD dominance, and redefining global money flows.

The G7 Stablecoin Pact: A Powerhouse for Cross-Border Innovation

The consortium’s announcement, detailed in statements from BNP Paribas and Reuters, underscores an early-stage exploration focused on creating a “stablecoin-like” digital asset compliant with G7 regulatory frameworks. Unlike decentralized alternatives, this initiative prioritizes systemic stability, leveraging the banks’ collective power and capabilities that could streamline and unify securities and derivatives clearing as well as existing payment rails. Key goals include near-instant settlements, reduced costs for international transfers, and enhanced transparency—benefits that could erode the edges of the $250 billion stablecoin market currently led by non-bank issuers.

This move isn’t isolated; it reflects broader institutional momentum. Goldman Sachs, a key participant, recently forecasted a “stablecoin gold rush” under U.S. frameworks, projecting USD-backed stablecoins alone reaching $2 trillion by 2028. For the G7 peg—likely a basket including the USD, EUR, JPY, and others—the alliance could drive demand for high-quality reserves like U.S. Treasuries, amplifying the GENIUS Act’s mandate for 1:1 backing in low-risk assets.

This table illustrates the global footprint, ensuring viability across jurisdictions while aligning with U.S. led frameworks.

Participating Banks	Headquarters	Key Role in Initiative
Bank of America	USA	U.S. Treasury expertise for reserves
Citi	USA	Cross-border payment infrastructure
Deutsche Bank	Germany	European regulatory navigation
Goldman Sachs	USA	Tokenization and market-making
UBS	Switzerland	Wealth management integration
Banco Santander	Spain	Latin American expansion
Barclays	UK	Derivatives and hedging support
BNP Paribas	France	G7 currency peg design
MUFG Bank	Japan	Asian market linkages
TD Bank Group	Canada	North American compliance

U.S. Regulatory Tailwinds: GENIUS and CLARITY Acts Pave the Way

The banks’ timing comes straight off the heels of the GENIUS Act, signed into law on July 18, 2025, establishes a federal stablecoin regime, requiring issuers to hold full reserves in assets like U.S. Treasuries and granting holders priority in bankruptcy. Complementing this, the pending CLARITY Act—passed by the House on July 17 and awaiting Senate action—delineates SEC-CFTC oversight, classifying certain digital assets as commodities to enable seamless tokenized securities trading.

Recent updates underscore accelerating implementation. On September 19, Treasury issued an Advance Notice of Proposed Rulemaking (ANPRM) for stablecoin licensing and AML compliance, with a Federal Register notice on October 1 seeking comments by October 20 (extensions under review). CFTC Commissioner Caroline D. Pham, in a September 5 address, hailed CLARITY’s harmonization as a boon for blockchain leadership, echoed in a September 29 SEC-CFTC roundtable and Nasdaq’s September 8 SEC filing to enable tokenized equities trading.

The U.S. legislation contrasts with Europe’s MiCAR, which mandates Euro-heavy reserves and EU-based issuers, potentially stifling innovation. In the U.S., GENIUS boosts Treasury demand—projected to surge with a “stablecoin stampede” for international institutions—while CLARITY streamlines market infrastructure. Analysts estimate a 75-85% likelihood of major securities adoption within five years, rising to 95% by 2035.

How the Alliance Catalyzes US Capital Market Tokenization

The G7 stablecoin initiative isn’t just a payments play—it’s a foundational layer for tokenizing the U.S. capital markets’ $500-550 trillion in assets. As equities ($62.8T market cap), bonds ($53-55T outstanding), ETFs ($10-11T AUM), and derivatives ($350-400T notional) migrate on-chain, the banks’ stablecoin could serve as programmable clearing and payment rail, enabling instant settlements and reducing operational costs by over $50 billion annually.

Approximately 4% interest on $7-$10 trillion in reserves that would otherwise be swept in money market funds in brokerage accounts pending reinvestment provides insights on profitability, much retained by issuers per GENIUS rules. These reserves also represent a boom in clearing and custody.

Major U.S. banks are lobbying to insert a yield ban into the CLARITY Act, prohibiting crypto exchanges from offering rewards on stablecoins to close a GENIUS Act “loophole.” They claim it safeguards deposits from competition, preserving profits on low-interest accounts while investing in high-yield Treasuries. Crypto firms like Coinbase are pushing back, calling it anti-consumer and a bank bailout. Senate markup, delayed by shutdown threats, is slated for October 2025.

This table illustrates the size of the U.S. securities and derivatives market. Tokenizing just 10-20% could unlock trillions in efficiencies, with the G7 stablecoin as the liquidity engine.

US Securities Segment	Mid-2025 Value	Tokenization Potential Impact
Equities	$62.8T	Instant proxy voting, fractional ownership
Bonds	$53-55T	Programmable coupons, reduced intermediaries
ETFs	$10-11T	On-chain rebalancing, lower fees
Derivatives (Notional)	$350-400T	Real-time collateral, CDS efficiency

Banks Get It All In the End

First there was disruption by cypherpunks—now it’s evolution. The 10-bank pact, guided by GENIUS and CLARITY, positions the bank alliance to lead a tokenized future that promises to reap trillions in operational cost savings and profits while fortifying dollar dominance.

Watch for Senate action on CLARITY and Treasury’s October deadlines.