Major U.S. Banks Are Considering a Joint Stablecoin Venture to Compete With Crypto Industry Leaders

But it, too, has had its own set of problems, including a temporary depegging of USDC in 2023 following the collapse of Silicon Valley Bank, stalled plans to go public via a SPAC deal in 2022, and declining market share. The entry of major global financial firms may soon test the staying power of both incumbents and chip away at their dominance.

Hong Yea, co-founder and CEO of GRVT, a licensed on-chain exchange, told Decrypt crypto-native issuers still have a critical role to play as traditional finance builds new infrastructure. “Crypto-native stablecoin issuers get an intrinsic grasp of how the blockchainized world functions,” Yea said. “Their years of experience, knowledge, and trials would be invaluable for the construction of institutional-grade stablecoin infrastructure.”

He likened the dynamic to traditional industries relying on digital consultants during early transformation efforts. “The traditional financial world’s navigation into the on-chain economy could have some help too from the natives,” he said. Yea added that if legacy players are to seriously engage with the stablecoin sector, crypto issuers must also step up their alignment with regulatory norms.

“I’d advocate for industry leaders to adopt a more proactive fashion with regulations and compliance,” he said. “Without hand-in-hand efforts from both sides, it’s going to be hard for the pie to grow as a whole.” For now, the discussion among banks remains in its infancy and could change at any time, per the report.