Stablecoin Race Gains Pace As 21 Banks Plan Dollar Token, Singapore Tightens Rules

A group of 21 financial institutions including Goldman Sachs, Bank of America, Citi and Deutsche Bank plans to establish a company this year to issue a dollar-pegged stablecoin in the first half of 2027, while Singapore has moved closer to introducing a formal regulatory framework for such digital assets.

The developments underline how banks and regulators are increasingly preparing for a financial system in which stablecoins could play a larger role in payments and cross-border money transfers.

The contrasting developments point to the next phase of the stablecoin market. The banks are preparing to compete in it, while regulators are trying to determine how it can operate safely within the mainstream financial system.

What The Banks Are Planning

The consortium was first announced in October 2025 with 10 banks. It now has 21 members and plans to expand beyond a US dollar-linked token to stablecoins pegged to other G7 currencies, with the euro identified as a priority, as per a report by Reuters.

Stablecoins are cryptocurrencies designed to maintain a stable value against an underlying asset, most commonly a fiat currency such as the US dollar.

They are widely used within crypto markets, but their ability to move money without relying entirely on conventional payment rails has also attracted interest from financial institutions.

The bank consortium will face competition from another group of 37 financial institutions that has formed Qivalis and plans to launch a euro-pegged stablecoin later this year, the report said.

However, adoption remains uncertain. El Salvador-based Tether dominates the dollar stablecoin market, with more than $180 billion of its token reportedly issued.

France’s Societe Generale launched a dollar-backed stablecoin last year, but only $12.5 million was in circulation, according to its website.

Singapore Moves Towards Stablecoin Rules

Singapore’s Monetary Authority of Singapore (MAS) has meanwhile opened a consultation on proposed amendments to the Payment Services Act that would establish a legal framework for stablecoins issued in the country.

Under the proposal, regulated stablecoin issuers would be barred from paying interest and would have to conduct stress tests, as per a report by Bloomberg (BBG).

They would also need recovery and orderly wind-down plans. Foreign issuers could seek recognition in Singapore if their home jurisdictions have comparable regulations.

“MAS’ stablecoin regulatory framework aims to facilitate the use of stablecoins as a credible digital medium of exchange, and as a bridge between the fiat and digital asset ecosystems,” MAS Deputy Managing Director Ho Hern Shin said, as per BBG.

The move comes as jurisdictions including the US, European Union, Hong Kong and Japan develop rules for stablecoins. Yet the growth has recently slowed, with the combined supply of six major dollar-backed stablecoins at $277 billion in August, as per data from Artemis, reported BBG.