Banks, Issuers Vie for Control of Stablecoin Routing Layer

The strategic battle over stablecoins is shifting from issuing digital dollars to controlling how they are routed, converted and settled, according to a PYMNTS analysis. Banks, payment networks, stablecoin issuers and blockchain operators are all building interoperability between different forms of digital money, each competing to own the infrastructure that sits between them.

Thirty-nine U.S. state banking associations have backed the BankChain Alliance, a network designed to support tokenized deposits, stablecoins and programmable payments. The alliance 39 US state banking groups form BankChain Alliance for 2027 blockchain launch targets a 2027 launch. Participating banks want a stake in the infrastructure, not just access to it. The word "owned" in the announcement signals that banks intend to control the layer that connects different forms of money, PYMNTS noted.

JPMorgan is reportedly considering a stablecoin alongside its tokenized-deposit infrastructure, PYMNTS reported, citing unnamed sources. A broader group of banks including Bank of America and Wells Fargo is exploring a multi-currency stablecoin initiative. JPMorgan already operates JPM Coin as a tokenized deposit through its Kinexys infrastructure. JPMorgan Considers Stablecoin as Banks Rethink Tokenized Deposits Tokenized deposits are institution-specific liabilities; stablecoins can travel more freely among wallets and blockchain environments, giving them a structural advantage in certain use cases.

The British government has proposed giving the Bank of England an explicit secondary mandate to encourage innovation in payments and digital money, including stablecoins. No date has been set for legislation.

The PYMNTS Intelligence report "Waiting for Certainty: Why Most CFOs Are Holding Back on Crypto and Stablecoins," released in March, showed that most middle-market companies remain cautious about digital assets. Only 13% of firms use stablecoins; 5% use other cryptocurrencies.

Interoperability is the industry's stated goal. Banks want tokenized deposits to work with other financial infrastructure. Stablecoin issuers want their tokens available across chains and platforms. Payment companies want digital and fiat currencies connected. Governments want domestic systems to participate in the emerging architecture without surrendering financial stability.

Interoperability does not eliminate competing interests. It reorganizes them. That makes the supposedly neutral interoperability layer one of the most commercially contested spaces in the stablecoin stack, PYMNTS argued.

Banks face the risk of becoming balance-sheet utilities if they cede the routing layer to payment networks or stablecoin issuers. Stablecoin issuers risk disintermediation if banks build proprietary networks that bypass their tokens. Payment networks and infrastructure providers are positioning to own the orchestration layer that connects stablecoins, tokenized deposits and fiat.

Wells Fargo, one of the banks exploring multi-currency stablecoins, carries an Alpha Score of 58/100 (Moderate) in the Financials sector. Its WFC stock page offers a reference point for investor exposure.

Clear regulatory frameworks defining liability and interoperability standards could reduce competitive tension. Open protocols allowing multiple issuers to route through common infrastructure might lower the chance of proprietary lock-in. Fragmented standards, proprietary networks requiring bilateral agreements, or regulatory uncertainty delaying adoption could entrench incumbents and limit competition. PYMNTS noted that most CFOs remain cautious, suggesting that without clarity the market may stay small.

The BankChain Alliance has set a 2027 launch target. The UK legislation timeline remains unset. The 13% stablecoin adoption rate among middle-market firms underscores how early the market is.