Some of the world’s largest financial institutions are joining hands to test a new form of digital money tied to traditional currencies.
According to a statement shared by BNP Paribas, banks including Santander, Bank of America, Barclays, Citi, Deutsche Bank, Goldman Sachs, MUFG, TD Bank, and UBS have begun collaborating on a project that would create a blockchain-based token fully backed by fiat reserves.
Though the announcement avoided directly calling the asset a “stablecoin,” it described plans for a “1:1 reserve-backed digital currency” operating on a public blockchain. The goal, the group said, is to determine whether such a system could improve efficiency, enhance competition, and still comply with strict financial regulations.
Stablecoins, which maintain their value by being tied to traditional currencies like the U.S. dollar or the euro, have evolved far beyond their origins as tools for crypto traders. Today, major corporations and financial institutions – from Meta to Amazon – are exploring similar models as digital payments move further into the mainstream.
The timing of this initiative aligns with growing political interest in regulating the sector. Earlier this year, U.S. President Donald Trump signed the GENIUS Act, which established a legal framework for the issuance and trading of stablecoins within the United States.
Meanwhile, analysts at Standard Chartered have warned that the rapid adoption of such tokens could reshape the global banking landscape. In a recent report, they estimated that stablecoins could attract up to $1 trillion in deposits away from banks in emerging economies over the next few years.
Despite regulatory safeguards, the bank’s researchers noted that even without offering direct yields, stablecoins are becoming increasingly attractive for institutions and individuals seeking faster, lower-cost international transfers – highlighting the shifting priorities of modern finance.
