21 banks are pushing for stablecoins, experts say traditional finance is turning to blockchain settl

Traditional finance is shifting from wait-and-see to construction, and competition between stablecoins and public chain infrastructure intensifies.

Industry experts said that traditional finance no longer debates whether stablecoins and public blockchain should belong to the financial system, but instead turns to competing for control of the infrastructure that will carry digital currency. As banks begin to develop their own digital dollar products in addition to mature stablecoins, tokenized deposits and other blockchain-based forms of money, the shift could reshape the way payments and institutional settlements work. This development will not replace existing tokens overnight, but could lead to a more fragmented market where interoperability, liquidity and settlement will become increasingly important.

Banks shift from wait-and-see to construction

Alex Witt, founding partner of Verda Ventures, believes that the participation of 21 financial institutions is one of the clearest signals that blockchain adoption is increasingly driven by traditional finance. "The fact that 21 banks support a stablecoin is the clearest signal yet that the growth of the blockchain track is now coming from traditional finance," Witt said. He pointed out that the debate has shifted from "whether public blockchains can support settlement" to "which institutions will control issuers operating on these networks." The group plans to form a new company to issue stablecoins for payments and digital asset transactions. Its first product is expected to be denominated in U.S. dollars, with other currencies to be introduced later. The move is significantly expanded from plans announced in October 2025, when 10 banks began exploring a reserve-backed digital payment asset that could run on a public blockchain.

stablecoins receive bank endorsement

Utkarsh Ahuja, founder and managing partner of Moon Pursuit Capital, said the decision to directly participate by banks represents a broader shift in the way traditional finance treats stablecoins. Ahuja said: "Banks have spent years debating whether stablecoins pose a threat to traditional finance. Now 21 large financial institutions are jointly issuing a stablecoin." He believes that as funds increasingly flow through blockchain-based systems, banks face strategic choices: either adapt to this shift or face the risk of being disrupted. The expanded group includes large institutions such as Bank of America, Citigroup, Goldman Sachs and UBS, as well as financial companies from North America, Europe, Asia, the Middle East and Africa. Ahuja does not expect the move to immediately seize significant market share from the USDT or USDC-which already have significant advantages in liquidity, distribution and established network effects. He said that the greater significance lies in the recognition effect when large financial institutions begin to regard stablecoins as part of their future financial infrastructure. This could create new demand for services that support on-chain finance, including custody, compliance, liquidity and settlement infrastructure.

Digital dollar market may move towards fragmentation

Kyle Sonlin, president and co-founder of the Global Settlement Network, predicts that multiple forms of digital currencies will coexist, rather than a single stablecoin being the only winner. "Stabilocins have demonstrated that there is a demand for dollars that can flow around the clock, and banks want to participate," Sonlin said. The market may eventually include bank-issued stablecoins, USDC, USDT, tokenized deposits, and digital currencies denominated in multiple fiat currencies. This will make interoperability increasingly important. If institutions hold different forms of digital dollars, they need to be able to trade between these assets without creating new settlement bottlenecks. Sonlin said that if liquidity and settlement between different digital assets are still limited by traditional banking hours, the value of round-the-clock availability is very limited.

Interoperability becomes infrastructure test

Bernardo Brites, co-founder and CEO of Trace Finance, said the development marks the transition of stablecoins from their native origins in cryptocurrencies to mainstream financial infrastructure. "This news proves that we are moving beyond the stage of experimentation with stablecoins as native cryptocurrencies and moving towards the core payment infrastructure that traditional finance wants to own," Brites said. He believes that the challenge is to get bank-issued stablecoins, tokenized deposits and existing digital dollar tokens to work together. A single network can provide fast settlement, but if assets are isolated from each other, this does not really solve the problem. Brites said the infrastructure connecting these systems, as well as the compliance and settlement technology underlying them, will become increasingly important.

Banks face an "ownership" race

Witt believes that emerging markets will develop in several different segments, mature stablecoins will remain important, while new bank-backed products target institutional clearing and other financial application scenarios. The consortium plans to launch its U.S. dollar stablecoin in the first half of 2027 and has made the euro a priority for future expansion. It also plans to structure the project around U.S. and European regulatory requirements. As a result, the project enters a market already dominated by dollar stablecoins-Tether's USDT and Circle's USDC have the largest shares. But experts believe that the more important competition may not just focus on stablecoin market share.