21 Banks Team Up to Build Their Own Digital Dollar and Take On USDC

Twenty-one financial heavyweights are pooling resources to mint a digital dollar of their own. Wells Fargo laid out the plan in a September 1 announcement, saying the group intends to stand up a company in 2026 and roll out its first dollar-backed token during the first half of 2027. The roster includes Goldman Sachs, Bank of America and Citi alongside 18 other institutions, plus asset managers Fidelity and WisdomTree and Sirius International Holding.

So why bother when Circle's USDC already handles dollar-denominated blockchain payments? Control is the short answer. Once ordinary dollars get swapped for USDC, those tokens sit as liabilities of Circle's issuing entity, not as deposits back at the customer's bank. Circle runs the reserves and the redemption plumbing while banks are left offering custody, distribution and payment rails. If stablecoins keep spreading, customer balances drift out of traditional deposit accounts.

Then there's the money. Stablecoin reserves are typically stuffed with cash and short-term Treasuries, which throw off interest income. Circle's own disclosures show how much those earnings matter to its bottom line, even with distribution deals that hand a chunk of the revenue to partners. A bank-run consortium figures it can keep more of that value for itself. What the group hasn't said is how reserve income, costs or profits would actually be split.

A single shared token also sidesteps a headache that individual bank coins would create: fragmentation. Picture a company holding digital dollars from Bank A while its supplier only takes tokens from Bank B — someone has to supply liquidity, charge a fee and settle the swap. One common stablecoin backed by many institutions could smooth that out, provided everyone agrees on redemption standards and interoperability.

The consortium is eyeing cross-border payments and digital-asset settlement, starting with dollars before possibly adding euros and other G7 currencies. That sets it apart from Japan's joint stablecoin effort, which has three major banking groups building a shared issuance setup, and from tokenized bank deposits, where customers hold digital versions of existing commercial-bank liabilities rather than a separate token claim. The group hasn't said whether its token will live on one blockchain or many.

Minting a digital dollar is the easy part. Getting businesses and platforms to use it is the real fight. USDC already has trading liquidity, exchange integrations and payment relationships that took years to build, so banks need to beat it on redemption, interoperability and whatever edge they can offer corporate clients. Circle isn't sitting still either — the company has explored privacy-focused USDC products for institutions that need confidential transactions.