Banks Gang Up on Stablecoins—Wall Street's New Favorite Foe Is a Token 🍂

Circle (CRCL) and Coinbase (COIN) shares each dropped more than 3% after reports that JPMorgan Chase and a consortium of major banks are advancing plans to issue their own stablecoins following progress on the CLARITY Act. The move puts traditional lenders on a collision course with crypto-native issuers such as Circle and Tether, and investors responded by trimming exposure to the publicly traded incumbents.

The selloff followed a Wall Street Journal report that U.S. banks are warming to stablecoins as nonbank issuers expand and executives worry the tokens could encroach on traditional banking. JPMorgan Chase has explored a potential stablecoin, though the discussions remain preliminary and no product is under development.

Separately, a consortium of more than a dozen banks, including Bank of America, Wells Fargo, and Santander, is advancing plans for a commercial-focused stablecoin. The consortium has discussed a stablecoin covering the U.S. dollar, the euro, and other Group of Seven currencies. On August 26, 2026, Watcher.Guru reported that Bank of America, Wells Fargo, Santander and over a dozen major banks were moving forward with plans to launch a crypto stablecoin.

Retail sentiment on Stocktwits for CRCL slipped from the extremely bullish zone to the bullish zone as chatter stayed at high levels over the past day. COIN sentiment remained in the extremely bullish zone, while chatter also stayed at high levels, indicating that retail engagement remained elevated despite the price action.

The broader banking industry has begun coordinating its response through the BankChain Alliance, which announced an industry initiative to develop a bank-owned network for digital asset settlement. The effort is designed to give participating lenders direct infrastructure for tokenized transactions, reducing reliance on third-party crypto issuers for payment and settlement rails tied to regulated deposits.

Together, the CLARITY Act's advancement, the consortium's multi-currency design and the BankChain Alliance's network plans mark the most coordinated push by U.S. banks into the stablecoin market to date, even as individual bank projects such as JPMorgan's remain in early discussion.