Goldman Sachs and BofA Lead 21 Banks in New Dollar Stablecoin Initiative

Overview

• A consortium of 21 major banks, including Goldman Sachs and Bank of America, has announced plans to create a U.S. dollar stablecoin, targeting a launch in the first half of 2027.
• The group has grown from an initial 10 banks exploring the idea since October 2025, now including institutions from various global regions.
• Circle's shares dropped roughly 6% following news of this new competition for its USDC stablecoin.

On Tuesday, a coalition of 21 financial institutions, spearheaded by Goldman Sachs, Bank of America, and Citi, unveiled their intention to establish a company that will issue a U.S. dollar stablecoin. This new entity, which is still unnamed, is expected to be operational by late 2026, contingent on meeting certain conditions.

It is essential to note that this initiative differs from a Central Bank Digital Currency (CBDC). Unlike a CBDC, which is a liability of a central bank like the Federal Reserve, this stablecoin will be a private liability backed by reserves from the participating banks, without any involvement from the Fed.

This distinction is particularly relevant in the U.S. context, as a 2025 executive order by President Donald Trump restricted federal agencies from developing a CBDC, while promoting private dollar-pegged stablecoins. Hence, the banks' stablecoin is not a covert CBDC but a preferred alternative supported by the U.S. government.

The consortium comprises banks from five regions: North America (including Goldman Sachs, Bank of America, and Citi), Europe (such as Santander and Deutsche Bank), and representatives from East Asia, the Middle East, and Africa, including MUFG Bank and Standard Bank.

The banks plan for the stablecoin to serve various markets, focusing initially on cross-border payments and digital asset settlements, with plans to introduce euro and other G7 currency versions after the dollar stablecoin launch. This initiative will comply with the U.S. GENIUS Act and the EU's MiCA framework.

Discussion about creating a joint token had been ongoing since 2025 among major banks like JPMorgan and Wells Fargo prior to this announcement, but JPMorgan is notably absent from the new consortium.

Additionally, this consortium joins other efforts to develop shared payment systems. In August, 39 state banking associations formed the BankChain Alliance to help community banks access tokenized deposits. Circle's stock has also been affected by competing initiatives, including the Open USD stablecoin supported by partners like Visa and Mastercard.