Stablecoin Plans Split as Banks Go Their Own Way

At the end of 2025, when a consortium of ten global banks announced they were exploring a stablecoin tied to G7 currencies, the news carried the weight of inevitability. It suggested that traditional finance was finally prepared to institutionalize digital money at scale.

In the months since, that institutionalization has gained greater momentum. But no unified “G7 stablecoin” has emerged. There is no shared token, no joint platform, no coordinated launch timeline from the 10 banks: BNP Paribas, Banco Santander, Bank of America, Barclays, Citi, Deutsche Bank, Goldman Sachs, MUFG Bank Ltd, TD Bank Group and UBS.

Instead, what has unfolded in the months since the announcement reflects a more complex reality. Rather than the advent of a single global stablecoin system, what has emerged is the fragmentation of efforts into competing regional, institutional and geopolitical tracks.

Read more: Why Banks Want to Issue Stablecoins

The Announcement That Signaled More Than It Delivered

In the original release, the consortium banks described a shared exploration of stablecoins backed one-to-one by reserves denominated in major currencies such as the U.S. dollar, euro and yen. The implicit vision was a multi-currency digital settlement layer, potentially operating across public blockchains but anchored in regulated financial institutions.

Instead of converging on a single G7-aligned framework, banks began pursuing narrower, more tractable initiatives. In Europe, a separate consortium of 10 financial institutions has moved forward with plans for a euro-denominated stablecoin, targeting regulatory approval and potential issuance within the next year. BNP Paribas, an original member of the G7 multi-currency consortium, was a late joiner of the EU-native initiative.

Meanwhile, individual banks have continued experimenting with tokenized deposits. Unlike stablecoins, which are typically issued by non-bank entities and backed by reserves held elsewhere, tokenized deposits are direct claims on a bank. They represent a digital extension of existing deposit accounts, rather than a new form of private money.

A tokenized deposit network built by the banks First Horizon, Huntington Bancshares, KeyCorp, M&T Bank and Old National Bancorp is expected to go live in the fourth quarter of this year.  Meanwhile, Barclay’s at the start of this year took a stake in the U.S. startup Ubyx, which specializes in stablecoin clearing. The partnership allows Barclays to accept any regulated stablecoin and instantly convert it into a “par value” bank deposit.

This fragmentation reflects a core challenge. While banks share a broad interest in digitizing money, they do not share aligned incentives around governance, revenue or risk. A unified global stablecoin would require agreements on who holds reserves, who earns yield, how compliance is enforced, and which jurisdictions set the rules.

Those questions remain unresolved, and in some jurisdictions face an uphill battle. As covered here in September, the European Central Bank reportedly wants to ban stablecoins jointly issued in Europe and other jurisdictions altogether. This would naturally complicate the issuance of any G7 stablecoin.

The banks involved in the G7 multi-currency stablecoin pilot did not immediately reply to PYMNTS request for comment. Deutsche Bank, in a February blog post, included the G7 stablecoin among its list of four banking sector stablecoin initiatives.

France’s President, Emmanuel Macron, is reportedly set to speak this month at Paris Blockchain Week 2026. He will be the first sitting G7 head of state to speak at an institutional conference dedicated to digital assets, and his address will touch on stablecoins, the digital euro and Europe’s role in the new global financial architecture.

See also: Can Crypto’s Open Network Dreams Survive Going Corporate?

A Layered Future for Digital Money

Beneath the technical and commercial considerations of the G7 stablecoin’s future lies a geopolitical dimension that is increasingly shaping the direction of stablecoin development. The push for non-dollar stablecoins, particularly in Europe, is not driven solely by market demand. It reflects concerns about strategic dependence on U.S.-denominated digital liquidity.

In a landscape where stablecoins play a growing role in cross-border payments and financial infrastructure, the currency in which those tokens are denominated carries significant implications. A dollar-dominated stablecoin ecosystem reinforces the global role of the U.S. financial system, extending its influence into new digital domains.

The original G7 consortium can be understood, in part, as an attempt to reconcile these competing interests and to create a shared platform that accommodates multiple currencies without privileging any single one. Its lack of progress to-date serves to highlight the difficulty of achieving that balance.

For many use cases, particularly in crypto markets and emerging economies, the simplicity of a single dominant stablecoin outweighs the theoretical benefits of diversification.

Rather than converging on a single outcome, the current trajectory points toward a layered system. At the base will likely remain dollar-denominated stablecoins, benefiting from existing network effects and global liquidity. Alongside them, regional alternatives such as euro-based tokens may gain traction in specific jurisdictions or use cases.

Above this layer, institutional solutions such as tokenized deposits and wholesale settlement systems will cater to banks and large financial actors, offering efficiency gains within controlled environments.

As Biswarup Chatterjee, global head of partnerships and innovation, Citi Services at  Citi, told PYMNTS in an interview posted in December, blockchain is not replacing traditional financial infrastructure, but rather being folded into it.

“What really excited us is the fact that we are able to integrate [blockchain] into our operating model … create a 24/7, always-on, on-demand ecosystem for our clients,” Chatterjee said. “But the key word is integration.”