TradingKey - Despite procedural setbacks for the U.S. stablecoin bill in the House of Representatives, major Wall Street financial institutions are accelerating their moves into the stablecoin space. JPMorgan Chase, Citigroup, and Bank of America have all recently announced that they are exploring or developing stablecoin-related products — signaling a pivotal shift as traditional finance embraces digital assets.

JPMorgan CEO Jamie Dimon, once a vocal skeptic of cryptocurrencies, has changed his tone. He revealed that the bank has launched its JPM Coin (JPMD) deposit token initiative and will participate in the stablecoin space, provided it remains within regulatory compliance. Citi CEO Jane Fraser made an even clearer statement, saying: “We are considering the possibility of issuing a Citi-branded stablecoin.” Meanwhile, Bank of America CEO Brian Moynihan noted the bank is collaborating with industry participants to explore potential use cases for stablecoins.

Currently, the U.S. Senate has passed a stablecoin regulatory framework that would place large issuers under the oversight of the Federal Reserve and the Office of the Comptroller of the Currency (OCC), while smaller issuers would fall under state-level regulation. The framework requires all issuers to maintain reserves in cash or U.S. Treasury securities and mandates regular disclosures and audits.

Although the House of Representatives failed to pass a procedural vote on the crypto bill, stablecoins are increasingly seen as a strategic asset within the U.S. financial system. Globally, 98% of stablecoins are pegged to the U.S. dollar, with over 80% of transactions occurring outside the U.S., highlighting their vast potential in cross-border payments.

At the same time, retail giants like Amazon and Walmart have reportedly joined the stablecoin race, aiming to bypass traditional payment networks such as Visa and Mastercard, potentially ushering in a new era of faster and more efficient settlement systems.

However, critics warn that stablecoins could pose systemic risks, including opaque reserve structures, the potential for funds to flow out of the traditional banking system, and the risk of being exploited for money laundering. Regulatory uncertainty remains the biggest variable facing the industry.

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