A potential shakeup in the digital payments world is underway as some of the largest US banks, including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo, are reportedly exploring the launch of a jointly developed stablecoin. According to The Wall Street Journal, the initiative involves payment firms like The Clearing House and Zelle operator Early Warning Services and marks a significant move by traditional finance into the tokenized dollar space.
That news comes as the US Senate advances the GENIUS Act, a sweeping bill to regulate stablecoins, which has now become the center of a political battle over ethics. Senate Democrats, led by Chuck Schumer, Elizabeth Warren, and Jeff Merkley, are preparing an amendment to block any sitting US president from profiting from stablecoin-related ventures, citing growing concerns about President Donald Trump’s ties to the USD1 stablecoin and recent crypto-linked fundraising events.
US Megabanks Reportedly Explore Joint Stablecoin as Senate Pushes GENIUS Act Forward
America’s largest financial institutions are reportedly in early discussions about launching a joint stablecoin project, according to sources cited by The Wall Street Journal. As Congress accelerates the regulatory framework for stablecoins under the GENIUS Act, the prospect of a unified banking-backed digital dollar could dramatically reshape both the crypto and traditional payments landscape.
The initiative is said to involve entities backed or co-owned by JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and other prominent banks. Two key players under discussion are The Clearing House, which facilitates real-time payments between US banks, and Early Warning Services LLC, the fintech company behind Zelle, the widely-used peer-to-peer payment platform.
The move signals growing institutional interest in the infrastructure behind digital dollars, particularly as legislation begins to draw clearer lines around stablecoin issuance and oversight. According to WSJ's sources, talks remain in preliminary stages, and no definitive timeline or launch structure has been established. However, the discussions represent a pivotal shift in how Wall Street may seek to enter and shape the future of digital finance.
Regulatory Momentum: The GENIUS Act Advances
The news comes on the heels of a major legislative development. On Monday, the US Senate advanced the Guiding and Establishing National Innovation for US Stablecoins Act, known as the GENIUS Act, clearing a key procedural vote with bipartisan support.
If passed into law, the GENIUS Act would become the most comprehensive federal framework yet for stablecoins. It would:
Mandate that all US-issued stablecoins be fully backed by cash or cash-equivalent reserves,
Require annual audits for issuers managing over $50 billion in stablecoin assets,
Introduce explicit limitations on stablecoins issued by foreign entities or with non-US backing,
Establish a licensing regime under the oversight of the Treasury and Federal Reserve.
The bill is widely viewed as a response to both the exploding growth of the $217 billion stablecoin market and concerns over financial stability, monetary sovereignty, and systemic risk.
Traditional Finance Meets DeFi?
A joint banking stablecoin would present a direct challenge not only to fintech giants like PayPal, Circle, and Tether but also to politically-aligned ventures like USD1. Unlike those projects, a stablecoin developed under the collective governance of multiple FDIC-insured banks and legacy payment networks could offer the type of trust, compliance, and interoperability regulators crave.
Banking insiders suggest that such a token could be integrated with existing rails like FedNow or serve as a foundational layer for interbank settlements, cross-border payments, or even commercial use cases like payroll and B2B invoicing.
The GENIUS Act now awaits final floor amendments and votes in the Senate before heading to the House of Representatives. Industry stakeholders are watching closely, as the passage of the bill could unlock a wave of corporate and banking investment into stablecoin ventures that have long awaited regulatory certainty.
If the bill becomes law, the stablecoin landscape in the US will fundamentally change, offering clearer lanes for banks, tech companies, and crypto-native startups to coexist or compete in.
Meanwhile, the notion of a JPMorgan-backed stablecoin sharing infrastructure with Zelle and Wells Fargo represents a potentially seismic shift in digital payments, an answer to years of crypto innovation that could either accelerate or contain it, depending on how it unfolds.
Democrats Target Trump’s Stablecoin Ties with Amendment to GENIUS Act
While the US Senate has taken a major step toward passing the first comprehensive federal legislation for stablecoins, political fault lines are hardening over a contentious issue: the financial entanglements of President Donald Trump with the crypto industry. A group of senior Democratic lawmakers, led by Senate Minority Leader Chuck Schumer, Senators Elizabeth Warren, and Jeff Merkley, is moving to introduce a pointed amendment to the GENIUS Act to block US presidents from profiting from stablecoin ventures.
The move comes just two days after the Senate voted to advance the GENIUS Act, with 18 Democrats crossing party lines to support the Republican-backed bill. The legislation, if passed, would establish a national regulatory framework for stablecoins, including audit requirements, backing mandates, and restrictions on foreign issuers.
But for Schumer, Warren, and Merkley, the bill’s current form leaves a gaping ethical loophole.
“Passing the GENIUS Act without our anti-corruption amendment stamps a Congressional seal of approval on Trump selling access and influence to the highest bidder,” Senator Merkley posted on X on May 22.
At the center of the controversy is World Liberty Financial (WLFI), a decentralized finance platform linked to Donald Trump and his three sons. WLFI launched the USD1 stablecoin in March 2025, shortly after Trump publicly endorsed dollar-pegged digital currencies as a critical component of US monetary leadership. The token has since gained traction among politically-aligned retail traders and international investors alike.
Trump’s WLFI (Source: Worldlibertyfinancial)
The platform came under even greater scrutiny after a $2 billion settlement deal involving USD1 was announced by an Abu Dhabi-based investment firm. The deal, which included settling transactions through Binance, raised alarms among watchdog groups and lawmakers who claim Trump’s family could profit directly from the volume and transaction fees of such stablecoin usage.
Critics argue that any regulatory clarity provided by the GENIUS Act could directly enhance the valuation and legitimacy of USD1, thus financially benefiting the sitting President—a scenario without precedent in modern US politics.
Amendment Seeks to Wall Off Political Profiteering
The amendment proposed by Senate Democrats aims to ensure that no sitting US president, or immediate family members, can financially benefit from stablecoins or entities that would fall under the jurisdiction of the GENIUS Act. It would likely require presidents to disclose crypto holdings, divest from stablecoin-related ventures, and prohibit any affiliated token from being used in state-sanctioned programs or infrastructure.
Legal experts say the amendment faces an uphill battle in a politically divided chamber but acknowledge its symbolism and significance.
Fueling the Democrats’ efforts is an exclusive dinner event that was hosted by President Trump on May 22 at one of his private golf clubs. The dinner is limited to 220 guests, which are all selected based on their substantial purchases of a Trump-branded personal meme coin.
National Security and Financial Ethics at Crossroads
As the GENIUS Act heads toward a final vote, expected within the coming week, the clash over this amendment shows broader concerns around digital asset regulation, especially when entwined with national leadership.
Supporters of the GENIUS Act argue that the stablecoin market’s explosive growth, currently valued at over $217 billion, demands urgent federal oversight. They warn that holding the bill hostage over political feuds could stall a rare opportunity for bipartisan progress.
Opponents, however, insist that any failure to install ethical guardrails could open the door for “presidential profiteering” at the cost of democracy.
As the Senate returns to session next week, all eyes will be on whether the GENIUS Act will include stronger ethics language, or whether stablecoin regulation in the US will go forward without clear limits on who gets to profit from it at the very top.
