Big banks explore venturing into crypto world together with joint stablecoin

Market context & banks’ motives

• Many see bank-issued stablecoins as inevitable: current market is dominated by Tether/USDT and Circle/USDC, with banks preferring not to be dependent on offshore or “crypto-bro” issuers.
• Some argue this is primarily defensive: banks trying to stay relevant and neutralize a competing paradigm by co‑opting it, not to improve customer service.
• Others think it’s a “race to the top” in perceived legitimacy: Tether → Circle → banks → potentially the Fed itself (CBDC).

Use cases vs existing payment systems

• Skeptics note that most countries already have instant, cheap bank transfers (SEPA, Faster Payments, Mexico, etc.), so blockchains aren’t needed for speed. The US is criticized as a regulatory/coordination laggard.
• Proponents highlight stablecoins’ role in international remittances, dollar access in weak‑currency countries, and handling cross‑border “edge cases” better than SWIFT/correspondent chains.
• Others counter that these are fundamentally regulatory/standards problems, not technology problems.

Decentralization, control & dystopian concerns

• Multiple commenters stress that bank or Fed stablecoins are the opposite of crypto’s original decentralization ideals.
• Programmable money is seen as both powerful and dangerous: same tools enabling smart contracts can enforce expiration, spend limits, geofencing, and de‑facto political/behavioral control.
• Some argue existing banking already allows heavy control; others say a single, globally centralized token system would be far more fine‑grained and harder to escape.

Regulation, AML/KYC & systemic risk

• Stablecoins run by banks would still need full AML/KYC; critics say current delays and costs are mostly compliance, which crypto cannot remove.
• Discussion of the GENIUS Act: concern that in an insolvency, stablecoin holders might be prioritized over bank depositors (“crypto ahead of ma‑and‑pa”).
• Stablecoins became lucrative once interest rates rose, since reserves can earn yield in Treasuries; debate over whether late entrants can still profit.

Technical architecture & “blockchain” meaning

• Several note that a permissioned, bank‑run stablecoin is essentially a shared database, not a decentralized blockchain solving double‑spend.
• Some expect banks to build their own closed chains/rails, invisible to end users, possibly interoperable with public chains for smart‑contract use.

Meta: crypto’s trajectory

• Thread splits between “crypto is still mostly scam/tulipmania” and “traditional finance capitulated; the infrastructure won.”
• Comparisons are drawn to historical free banking and private banknote issuance, with differing views on whether this reduces or increases systemic risk.