Circle Internet stock falls after banks eye stablecoin launch

Investing.com -- Circle Internet Group (NYSE: CRCL) shares fell 4% Wednesday following a Wall Street Journal report that banks are now considering launching their own stablecoins after previously opposing them.

The report indicated that banks large and small have started to warm up to the idea of their own stablecoins, despite earlier doubts from some executives about demand. Major nonbank companies such as Visa, BlackRock, Google and DoorDash have moved to get involved in the stablecoin market, which has been dominated by Tether and Circle.

JPMorgan Chase recently evaluated whether it could launch its own stablecoin, according to people familiar with the matter cited by the WSJ. The largest U.S. bank already has a tokenized deposit called JPM Coin and its own blockchain. A JPMorgan spokeswoman said the bank has no plans to issue a stablecoin but would evaluate all options depending on customer demand and regulatory developments.

A group of more than a dozen financial institutions including Bank of America, Wells Fargo and Santander has been moving forward on a stablecoin venture that would reach across the globe, according to the report.

Some bank executives over the past year had shrugged off the need for stablecoins and the industry waged a lobbying battle against crypto firms that wanted to offer stablecoins that would act like bank deposits. Instead, banks banded together to launch a tokenized deposit system.

Stablecoins are digital tokens pegged to the U.S. dollar or other currencies, while tokenized deposits are traditional money represented as digital tokens. Banks are now considering whether there could be a need for both, with some executives worried stablecoins could encroach on their businesses.

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