For years, US banks viewed stablecoins as a potential threat to deposits and the traditional payments system. Now, a large section of the banking industry is preparing to put blockchain technology at the heart of its own financial infrastructure.
Thirty-nine US state bankers associations have formed the BankChain Alliance, an industry-owned initiative that plans to build a common blockchain network capable of supporting stablecoins, tokenised bank deposits, smart payments and automated settlement.
The associations represent thousands of financial institutions across the US, potentially giving smaller and regional banks access to blockchain capabilities that would otherwise require substantial individual investment.
BankChain is currently selecting a technology partner and is targeting a launch during 2027.
The development highlights an important evolution in the relationship between traditional finance and crypto: banks are no longer debating whether blockchain will have a role in payments. Increasingly, they are deciding who will control the infrastructure.
Banks take blockchain into their own hands
BankChain describes the proposed network as “industry-owned, industry-designed and industry-governed”, distinguishing it from blockchain platforms controlled by individual technology companies or large financial institutions.
Participating institutions are expected to be able to provide services including tokenised deposits, stablecoins, automated settlement and programmable payments while operating within traditional banking regulatory requirements.
The network is also intended to be interoperable with other financial and blockchain networks rather than functioning as a closed system.
“This is about banks of all sizes building their own future,” BankChain Alliance interim chair and Florida Bankers Association president and CEO Kathy Kraninger said.
For community and regional banks, that could be particularly important.
The largest global banks have the resources to develop proprietary digital-asset infrastructure. Smaller institutions generally do not.
Pooling development through BankChain could give thousands of institutions access to similar capabilities without requiring each bank to construct its own blockchain architecture.
Stablecoins changed the calculation
The backdrop is the rapid expansion of stablecoins from a crypto-market settlement tool into a potential competitor to conventional payments and banking deposits.
US banks initially pushed back strongly against stablecoins, concerned that consumers and businesses shifting money into privately issued digital dollars could drain deposits from the banking system.
That concern has not disappeared.
What has changed is the response.
Large banks are now considering their own stablecoins and tokenised deposits, while smaller institutions are exploring shared infrastructure such as BankChain. JPMorgan is evaluating issuing a stablecoin alongside its existing tokenised deposit operations, while a separate multinational banking initiative involving institutions including Bank of America and Wells Fargo is also examining stablecoin infrastructure.
The US regulatory environment has also changed materially.
The GENIUS Act established a federal framework for payment stablecoins, forcing banks to consider whether they want to issue digital currencies themselves, provide custody, develop tokenised deposits, partner with other providers or risk watching payments migrate elsewhere.
Stablecoin or tokenised bank deposit?
One of the most important battles may ultimately be between stablecoins and tokenised deposits.
Both can move money digitally using blockchain infrastructure, but there is an important difference.
A stablecoin such as USDT or USDC is generally issued against reserves held by its issuer. A tokenised deposit represents money held at a regulated commercial bank, effectively putting an existing bank deposit onto blockchain infrastructure.
That distinction matters because banks want the efficiency and programmability of blockchain without losing the deposits that underpin their lending businesses.
BankChain is notable because it is being designed to accommodate both.
That suggests banks may not be betting on one form of digital money replacing the other. Instead, the emerging financial system could contain conventional deposits, tokenised deposits and stablecoins operating across interconnected networks.
Is this bullish for crypto?
For crypto investors, BankChain represents a different kind of adoption story.
It does not necessarily create direct demand for Bitcoin, Ethereum or another public cryptocurrency.
Indeed, the BankChain Alliance has yet to disclose what type of blockchain it will use, whether the network will be public or permissioned, how transactions will be validated or which individual banks will participate.
But the broader signal is difficult to ignore.
Blockchain technology is moving further away from being infrastructure used primarily by cryptocurrency exchanges, decentralised finance platforms and stablecoin issuers.
Banks themselves increasingly want to use it.
And that creates an intriguing inversion of the original crypto thesis.
Bitcoin was created in part to allow value to move without banks.
Less than two decades later, the banks are building blockchains of their own.