It is also not hard to see why the biggest banks say America have just stopped lobbying against crypto and started building against it.

A case against stablecoins for two years: JPMorgan, Citigroup, Bank of America and Wells Fargo: Sending lobbyists, calling senators, delay CLARITY. Pushing Back on Yield Provisions in the CLARITY Act To prevent said crypto firms from offering interest on dollar-pegged tokens as this would withdraw deposits from banks.

They revealed that they are constructing a payment network based on the blockchain.

As the Wall Street Journal reported and the banks confirmed in a joint press release, its project will be run through The Clearing House, which is a real time payments company the institutions jointly own.

Target launch: 1st half of 2027 The coalition includes BNY, BMO, HSBC, PNC, TD Bank, Truist and Santander along with nine other US Commercial Banks - making the participant list far wider than it initially seemed via the headlines. Seventeen banks total. The selection of a blockchain vendor is still in the works.

What they are actually building

Internally, some banks refer to it as "the bridge". Others call it "the chain." It does something pretty simple: takes normal bank deposits and turns them into tokens that are represented on a blockchain, which can transfer between banks in moments anytime of the day for any day of the week.

And this is where a stablecoin differs from one very key and critical detail. A tokenised deposit is not a digital asset in its own right. Still a bank deposit, still insured, still KYC/AMLed, still in the regulated banking system. The token is merely a faster, programmable device for circulating that deposit. It never leaves the bank. It is not really leaving one account for another but changing on a shared blockchain infrustructure (rather than using ACH or wire transfer which takes days/hours and does not work off hours).

Clearing House CEO David Watson called it "a big move for the banks," suggesting that a "radically different" future awaits on-chain payments in the industry. That is unusually blunt language for an administrator who typically communicates in moderated terms.

Why now

263 billion bucks.

The amount USDT and USDC together have at the moment in circulating supply. That number was roughly one hundred thirty billion dollars two years ago. While the banks were sitting there in Washington arguing about whether or not the stablecoin-market should exist, it doubled.

This is why USDC was adopted by large corporations for treasury management and cross-border payments, it settles in seconds, and doesn’t stop working at 5pm on a Friday. Banks saw that happen and concluded that a robust strategy for lobbying wouldn't be enough.

"The network reinforces banking's role as the backbone of financing and capital markets," asserted Citi's Shahmir Khaliq. Mark Monaco was a little more candid with their time line at Bank of America. He recognized that clients are not coming "knocking on the door" for tokenized deposits but claimed use of the network would give banks a leg up when interest picks up.

And that chasm between Khaliqs confidence and Monacos candour speaks to the true state of the industry. It is not a reaction based on huge customer demand from the corporate life. It's a response to the path that travel has taken, and the direction of travel passes through stablecoins.

The context that matters most

Coinbase CEO Brian Armstrong was called out by JPMorgan CEO Jamie Dimon over two weeks ago due to linked provisions tied to stablecoin yields in the ongoing Congressional CLARITY Act. Senate continues to review the plans for crypto firms allowing interest payments on USDC It has already been the clearest warning from banks that they want a hard ban on that.

Translation of that argument into product is the tokenized deposit network. The yield argument is moot if banks can provide the same speed, programmability, and 24/7 settlement that stablecoins do without driving deposits out of the insured and regulated banking system. Why would you hold USDC to pay for stuff if your Chase deposit token does the same thing with FDIC backing?

That is the wager that the coalition is placing. JPMorgan operates a version called JPM Coin for clients, and recently launched a deposit token on Coinbase's Base blockchain. Citi has also developed an instant payment system for cross-border payments called Citi Token Services. BNY introduced its own institutional tokenized deposit service earlier in January.

The 2027 network will have a head start. This brings together existing efforts into a common infrastructure that is likely to be the first serious competitor ever for the stablecoin ecosystem that has been forming around it for three years.

And the lobbying is happening while the building is underway. Wall Street has decided that trying to take on crypto from the outside is inadequate. To that end, it needs to develop something internal that obviates the crypto option.

Pumpfun’s bounty took an interesting turn

• Japan’s stock market is exploding into smithereens: Nikkei plunged 4.2%!!!

• South Korea's KOSPI stock market halted after 8.4% crash, triggering circuit breaker.

• Key Events This Week

• Bitcoin surges 5% to $64,000 after President Trump says Israeli PM Netanyahu has "no choice" but to accept an Iran deal.

• Elon Musk predicts SpaceX could become the largest & most profitable company in this sector of the galaxy.

Join the Conversation!

We'd love to hear your thoughts and comments. Join our community and stay updated with the latest trends and discussions in crypto.

Twitter | Instagram | Telegram Channel | Linkedin | Facebook