Major Banks Begin Testing Stablecoins for Cross-Border Payments

February 18, 2025 — Global banking giants including JPMorgan and Citigroup have launched pilot programs to test stablecoins in international money transfers. The move could reshape traditional interbank settlement systems and strengthen the role of digital assets in mainstream finance.

Technology and Testing Goals

JPMorgan and Citi are exploring how stablecoins — digital currencies pegged to fiat — can streamline cross-border payments. The goal is simple: reduce transaction times from days to seconds, and cut costs by eliminating intermediaries.

Blockchain technology enables near-instant transfers, with transparent tracking and lower fees. JPMorgan’s internal blockchain platform, Onyx, already facilitates domestic settlements using digital assets. Now, the bank is expanding its experiment globally, onboarding large corporate clients to test real-world use cases.

Regulatory and Legal Challenges

One of the biggest hurdles in adopting stablecoins for banking is regulation. Fiat-backed stablecoins must comply with strict financial standards. Regulators in the U.S. and Europe have expressed interest in the pilots and are actively discussing frameworks for such operations.

Citigroup is in talks with central banks across multiple jurisdictions to align legal structures. Company representatives emphasize that any new system must meet AML (Anti-Money Laundering) and KYC (Know Your Customer) requirements — a non-negotiable for institutional adoption.

Potential Benefits and Risks

Stablecoins offer clear advantages in cross-border finance:

• Speed: Transactions can settle in seconds instead of days.
• Lower fees: Fewer intermediaries mean reduced costs.
• Transparency: Blockchain allows real-time tracking and auditability.

But there are risks too:

• Regulatory uncertainty: Lack of global standards could slow adoption.
• Technical vulnerabilities: Blockchain networks must withstand cyber threats.
• User trust: Businesses and individuals need time to adapt to new systems.

Market Outlook and Long-Term Impact

If the pilots succeed, stablecoins could become a standard tool for international settlements. Banks may use them not only for internal transfers but also to serve corporate clients, accelerating the integration of digital assets into traditional finance.

Experts predict the emergence of hybrid banking models — combining fiat and digital currencies — and the development of new financial instruments. This could lead to more flexible, programmable money and smarter liquidity management across borders.

Beyond the Headlines: What It Really Means

JPMorgan and Citi aren’t just experimenting — they’re signaling a shift. Traditional banks are no longer ignoring blockchain; they’re embracing it. The promise of faster, cheaper, and more secure payments is too compelling to ignore.

But this isn’t just about tech. It’s about trust, regulation, and global coordination. The success of these pilots depends not only on code, but on policy. Central banks, lawmakers, and compliance teams will shape what comes next.

What Comes Next?

If testing goes well, stablecoins could gradually replace outdated systems like SWIFT and correspondent banking. Expect new regulatory proposals, more banks joining the initiative, and faster digitization of global finance.

Still, don’t expect overnight change. Legacy systems are deeply entrenched, and global consensus takes time. But the direction is clear: digital assets are moving from fringe to infrastructure.

Stablecoins: Not Just a Trend — A Tool for Transformation

Stablecoins aren’t speculative tokens — they’re functional tools. When backed by fiat and governed responsibly, they offer a bridge between traditional finance and blockchain innovation. Their adoption by major banks marks a turning point: crypto is no longer just for startups and retail traders. It’s becoming part of the financial backbone.

Whether this leads to full-scale disruption or gradual evolution remains to be seen. But one thing’s certain: the institutions that once resisted crypto are now building with it. And that changes everything.

Disclaimer

Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency and blockchain technologies involve risks, including regulatory uncertainty and market volatility. Readers should conduct their own research and consult professional advisors before making decisions. fakto.top does not endorse specific assets or platforms and is not responsible for third-party content or outcomes.