Banks Join the Stablecoin Rush to Keep Treasury Float

Twenty-one financial firms said on September 1, 2026 they will form a company to issue a dollar stablecoin in the first half of 2027. They join a field that already has Open USD, PayPal’s custom tokens, and two giant trading coins.

The U.S. GENIUS Act, signed July 18, 2025, already fixed the product. A permitted payment stablecoin must be backed 1-to-1, may not pay holders yield, and parks most of its cash in short-term Treasuries. New logos do not change that math.

Twenty-One Firms Will Share One Dollar Token

The group said it will set up the unnamed company in the second half of 2026, subject to closing conditions, then bring a dollar token to wholesale, institutional, and retail users. Cross-border payments and digital-asset settlement sit at the top of the use list. Other G7 coins would follow, with the euro named as the next priority.

North America supplies Bank of America, Capital One, Citi, Fidelity Investments, Goldman Sachs, PNC Financial Services, Scotiabank, TD Bank Group, Wells Fargo, and WisdomTree. Europe supplies Banco Santander, BBVA, Commerzbank, Crédit Agricole, Deutsche Bank, Lloyds Banking Group, Rabobank, and UBS. MUFG Bank, Sirius International Holding, and Standard Bank fill East Asia, the Middle East, and Africa.

That roster grew from a 10-firm exploration in October 2025, an increase of 11 names. The joint statement named no ticker, no chain, and no reserve mix. Boston Consulting Group and Brunswick Group are advising. JPMorgan Chase is not in the group. It already runs JPM Coin for institutional clients on public blockchain rails, a separate deposit-token track.

Nine days after the bank announcement, PayPal, M0, and MoonPay opened PYUSDx, a platform for branded coins backed by PayPal USD. Saturn, Concrete, and Cap had processed more than $100 million through it. MoonPay Digital Assets Limited issues the custom tokens; Paxos Trust Company still issues the underlying PYUSD. Revolut’s U.S. bank, given conditional OCC approval on September 2, 2026, plans a branded coin it will not issue itself.

The Law That Flattened the Product

Congress wrote a payments instrument, not a savings product. Only a permitted payment stablecoin issuer may issue in the United States: a bank subsidiary, an OCC-supervised nonbank, or a state issuer under a regime Treasury certifies as substantially similar. Foreign coins need an equivalent path or a licensed U.S. arm. Tether’s USDT is not a permitted U.S. issuer, which is why it launched USAT in January 2026 through Anchorage Digital Bank.

No permitted payment stablecoin issuer or foreign payment stablecoin issuer shall pay the holder of any payment stablecoin any form of interest or yield (whether in cash, tokens, or other consideration) solely in connection with the holding, use, or retention of such payment stablecoin.

GENIUS Act, S. 1582, 119th Congress

That ban on paying holders yield is why so many brands can pile in and still sell the same dollar. The float stays with the issuer, a distributor, or the partner board. The holder gets a token that is supposed to stay at one dollar.

Reserves have to be identifiable and at least 1-to-1. They cannot be pledged or reused except in narrow liquidity cases. Monthly reserve reports need officer certification, and larger issuers face annual audited statements.

WHAT GENIUS ALLOWS IN RESERVES

• Cash and Fed balances: U.S. coin and currency, including Federal Reserve notes, or money credited at a Federal Reserve Bank.
• Bank deposits: Demand deposits or insured shares at an insured depository institution, with safety limits the FDIC and NCUA may set.
• Short Treasuries: Bills, notes, or bonds with remaining maturity of 93 days or less, or issued at that maturity.
• Overnight backstops: Repo and reverse repo tied to those Treasuries, plus shares of government money market funds that hold only the same asset set.

The OCC issued a proposed rule on February 25, 2026. Treasury followed with a distributor proposal in August. Final text is still pending. The statute itself takes effect on the earlier of 120 days after those finals, or January 18, 2027.

Who Keeps the Treasury Bill Yield?

If the token cannot pay the holder, the only fat revenue line is the bill portfolio. Tether’s Q1 2026 attestation, prepared by BDO, put Treasury exposure at about $141 billion. Circle parks most USDC reserves in a BlackRock government money market fund. In June, Fidelity, State Street, and Invesco each launched or filed funds built as GENIUS-style reserve sleeves.

Standard Chartered has projected a $2 trillion stablecoin market by the end of 2028, with $800 billion to $1 trillion of extra T-bill demand and about $500 billion of deposits moving across by then. Those are forecasts, not current books. They explain why Treasury officials talk about the coins as a bid for government paper.

In August 2025, Treasury Secretary Scott Bessent tied the new law to that bill bid in public.

Implementing the GENIUS Act is essential to securing American leadership in digital assets.

Stablecoins will expand dollar access for billions across the globe and lead to a surge in demand for U.S. Treasuries, which back stablecoins.

It’s a win-win-win for everyone involved:… https://t.co/p5nRQpBfnw

— Treasury Secretary Scott Bessent (@SecScottBessent) August 18, 2025

Banks spent the summer trying to reopen the yield terms inside later market-structure bills. The holder-yield ban was the price of a federal license. Reopening it would put the tokens back in a rate fight with insured deposits, which is the fight lenders want closed.

THE FLOAT SPLIT

Exchange rewards still sit in a gray zone the OCC has tried to tighten with a rebuttable presumption against coordinated payouts. The statute names the issuer. The fight has moved to affiliates.

Lenders Are Building a Second Rail

A payment stablecoin is a bearer claim on a segregated reserve pile. It has no deposit insurance and no automatic window at the Fed. A tokenized deposit is still a bank deposit, with the $250,000 insurance cap and, for the issuing bank, access to last-resort liquidity. Nellie Liang’s April 14, 2026 Brookings commentary walks through those tokenized deposits and payment coins as substitutes that are not interchangeable.

U.S. commercial banks held about $19 trillion of deposits when Liang wrote. That is the balance sheet the new coins nibble at. A Treasury advisory council, cited by the Congressional Research Service, put $6.6 trillion of transactional deposits in the at-risk column if coins pull cash out of banks. Community lenders feel that first, because they cannot stand up their own token and still fund loans the old way.

Several of the same names are also backing a shared tokenized deposit network under The Clearing House, aimed at the first half of 2027, the same window as the 21-firm coin. The operator already clears more than $2 trillion a day on wires, ACH, checks, and real-time payments. The missing piece is a deposit that other banks can clear around the clock without turning it into a stablecoin.

Liang put JPMorgan’s blockchain deposit volume at more than $7 billion a day. She also noted that banks talk more about issuing deposit tokens, and about distributing other people’s coins, than about minting their own. The September 1 statement is the exception: a shared coin so no single lender has to go first, and so the float does not all sit at Circle or Tether.

On the user side, an EY Parthenon survey of 350 companies found 13% already using stablecoins, with more than 50% of the rest expecting to start in six to 12 months, mostly for supplier payments and receipts. EY Parthenon has said coins could handle 5% to 10% of cross-border payments by 2030, or $2.1 trillion to $4.2 trillion. McKinsey and Artemis Analytics put 2025 stablecoin payments at about $390 billion. The World Bank’s average global remittance fee was about 6.5% in 2024, which is the gap smaller corridors keep citing.

Open USD Hands the Float to Partners

Open Standard announced Open USD on June 30, 2026, with more than 140 businesses on the list, including Visa, Stripe, Mastercard, American Express, BlackRock, Coinbase, Google, and Shopify. Minting and redeeming are supposed to be free, with no volume caps. Stripe has said the token will be the default stablecoin for businesses on its platform. Stripe bought Bridge for $1.1 billion to own that issuance stack.

Partners receive all of the earnings from Open USD’s reserves, less a small management fee to cover Open USD’s operational costs.

Open Standard, Introducing Open USD, June 30, 2026

That sentence is the whole model. Holders still get a non-yielding dollar, as the law requires. The partners receive the reserve earnings instead of a single issuer. Open Standard is supposed to run as an independent company with a partner board. The token is due later in 2026. It is not live yet, and the group has not locked a single chain as the home rail, though Tempo has said it will carry native issuance from day one.

SoFi already shipped a branded coin through Paxos, a white-label pattern Revolut is copying in the United States. Brands want distribution. Licensed issuers want the charter. Asset managers want the T-bill fund. That split is why 140 logos can sit on one coin without 140 reserve books.

Most Crypto Trades Still Clear in USDT

DeFiLlama put USD stablecoin supply at $311.52 billion on September 13, 2026. August tallies showed a first monthly rise in three months, to $311 billion, up 1.19%. USDT was $183 billion, broadly flat after three down months. USDC was $73.9 billion, up 2.61%. USDT’s share was 59.0%. Euro-denominated coins hit $776 million, up 6.0% on the month and 68.2% year on year, with Revolut’s EURR, issued by Stripe-owned Bridge, adding a regulated euro option under MiCA.

THE CASH THE COINS SIT BESIDE

• September supply: $311.52 billion of USD stablecoins on DeFiLlama as of September 13, 2026.
• Bank deposits: about $19 trillion at U.S. commercial banks in the April Brookings baseline.
• 2025 payments: about $390 billion of stablecoin payments, per McKinsey and Artemis Analytics.
• Remittance fee: about 6.5% on average globally in 2024, per the World Bank.

USDT still does the trading-pair work. Circle still does the regulated-treasury work. USDC traded at 86 cents during the 2023 collapse of Silicon Valley Bank, a reminder that a reserve coin can break from par when the cash sleeve sits in an uninsured bank. Liang counted a monthly average of six Tether arbitrageurs against 521 for Circle, and USDC on 32 blockchains as of April 2026. Those are different machines under the same dollar label.

Circle’s OCC trust bank, approved July 10, 2026 as Circle National Trust, lets it custody and manage USDC reserves under federal watch. It cannot take deposits or make loans. Circle shares jumped more than 7% on the news and were still down almost 20% on the year that day, after Open USD landed as a partner-owned rival. On September 8 it agreed to buy Tazapay, a Singapore B2B payout network with more than $25 billion of annualized volume, 60-plus banking and fintech partners, rails in more than 100 markets, and about 60% of volume already in stablecoins. That is a distribution buy, not a new coin.

The Licensing Clock Runs to January 2027

The 21-firm token is aimed at a market that will, by then, only accept permitted U.S. coins on regulated platforms. Three years after enactment, digital-asset service providers cannot offer a payment stablecoin to a U.S. person unless a permitted issuer minted it. The earlier gate is January 18, 2027, unless agencies finish sooner and start the 120-day clock.

THE PATH TO A U.S. LICENSE

1. July 18, 2025: President Donald Trump signs the GENIUS Act, creating federal rules for payment stablecoins.
2. October 2025: Ten banks say they are exploring a 1:1 reserve-backed digital payment asset on public blockchains.
3. June 30, 2026: Open Standard announces Open USD with more than 140 partners and a later-2026 go-live.
4. July 10, 2026: The OCC approves Circle National Trust, a custody and reserve vehicle with no deposit-taking.
5. September 1, 2026: Twenty-one firms commit to a shared dollar-coin company for a first-half 2027 launch.
6. January 18, 2027: Statutory backstop date for the GENIUS regime if final agency rules are still late.

A Federal Reserve staff note published September 4, 2026 mapped why putting payment stablecoins into M1 or M2 would double-count the same dollar, because GENIUS reserves are already deposits, bills, and government funds. The coins sit outside the aggregates for now. They still move the front end of the bill market when issuance swells or shrinks.

The Bank of England, for sterling systemic coins, cut its unremunerated central-bank deposit floor to 30% and allows up to 70% in short-term gilts, another supervisor trying to keep a run from dumping paper into a thin bill market. U.S. issuers get a wider T-bill sleeve and no holder yield. That is the bargain the 21 firms just signed up to share.

Until someone ships a live token with a public reserve book, the crowding is a stack of press releases on top of USDT’s trading float. The first-half 2027 bank coin will arrive after the January 18, 2027 licensing gate, into a dollar market that still clears most crypto trades in a token the new law does not treat as a U.S. permitted issue.

Disclaimer: This article is news reporting and analysis of public market and policy developments around dollar stablecoins. It is informational only and does not constitute investment, legal, tax, or trading advice, and it is not a recommendation to buy, sell, or hold any token, equity, or Treasury security. Readers should consult a licensed financial adviser and, where relevant, a qualified attorney before acting on any product or allocation discussed here. Figures and project statuses are taken from the cited primary materials and market trackers as of the dates named in the piece and can change as rules are finalized and coins are issued.