Stablecoin Adoption by Banks: What JPMorgan and BofA Are Doing in 2025

Major banks are moving fast on stablecoin adoption to speed up payments and cut costs. In March 2025, JPMorgan Chase and Bank of America began testing dollar-backed tokens for real-time transfers and settlement. This shift shows stablecoin use cases now include payroll, cross-border trade, and instant merchant payouts.By backing tokens with short-term government notes, these banks aim to boost trust and lower counterparty risk. As crypto adoption grows among enterprises, regulated players like JPMorgan and BofA are setting standards for compliance and security. In this article we’ll focus: how these two banking giants are reshaping digital currency in 2025.

JPMorgan and BofA: The Banking Shift Toward Stablecoins

In early May 2025, both JPMorgan and Bank of America announced plans to issue and integrate dollar-pegged tokens for internal settlement and client services. This marks a clear turn toward stablecoin adoption in legacy finance. By using blockchain rails, they hope to reduce settlement times from days to seconds, enhance liquidity management, and offer clients transparent audit trails on every transaction. As interest grows in how to create a stablecoin, these initiatives signal mainstream confidence in the technology. Moreover, rising stablecoin transaction volume across financial institutions further validates the shift. Both banks emphasize robust controls, licensing, and collaboration with regulators to ensure stablecoin development meets all legal and compliance standards.

Reasons Behind The Banking Shift Toward Stablecoins:

Instant Settlement: Banks plan tokenized dollar transfers to clear interbank payments in seconds instead of hours, cutting reliance on legacy clearing systems and reducing settlement risk.
Liquidity Optimization: By locking reserves in on-chain accounts, banks can monitor
collateral in real time, freeing up capital and lowering funding costs for clients.
Cost Efficiency: Token moves replace multiple intermediaries in payment chains, trimming fees by up to 70% while maintaining compliance through built-in audit logs.
Cross-Border Reach: Stablecoins can bridge global accounts without SWIFT delays,
enabling fast, transparent forex exchanges at predictable rates for corporate customers.
Regulatory Alignment: Both banks are engaging with the Office of the Comptroller and SEC to embed KYC/AML checks into smart contracts, ensuring tokens meet existing banking rules.

Why Banks Are Embracing Stablecoins in 2025

1. Faster Transactions

Banks face pressure to meet 24/7 payment expectations. Stablecoin adoption enables JPMorgan and Bank of America to process trades, pay employees, and handle supplier payments instantly, shrinking settlement times from several days to just seconds. This speed reduces counterparty risk and capital lockdown. Clients see lower float costs, while banks improve liquidity. On-chain proof of reserves adds transparency. As trading desks push digital assets, tokenized dollars tie directly into treasury platforms for instant balance updates, aligning with growing demand for streamlined cash management and improved cash-flow forecasting.

2. Lower Operational Costs

Traditional payment rails involve multiple intermediaries, each adding fees. By issuing stablecoins, banks replace correspondent networks with smart contracts, automating reconciliation and reducing manual processes. Each token move logs details on blockchain, eliminating paper trails and lowering audit work. Clients benefit from lower transfer fees. With stablecoins, banks can standardize messaging formats and automate compliance, cutting overhead and offering competitively priced services in global treasury and trade finance.

3. Enhanced Transparency

Stablecoins provide immutable records of every transfer and reserve movement. Clients and regulators can audit token holdings in real time, reducing the risk of hidden exposures and fraud. For banks, on-chain traceability enables automated reporting and faster anomaly detection. Auditors can verify token minting against collateral pools, ensuring 1:1 dollar backing. This transparency builds trust and supports broader crypto adoption by enterprises wary of black-box systems.

4. Programmable Finance

Smart contracts let banks embed business rules directly into tokens. For example, they can enforce spending limits, release funds based on milestones, or automate interest payments. This flexibility opens new use cases like event-driven payouts, auto-rolling short-term investments, and real-time tax withholding. Programmable stablecoins help banks upsell treasury services by bundling payments with risk-management features. As clients seek digital-first workflows, these token abilities drive demand for bank-issued coins integrated with ERPs and trading platforms.

5. Competitive Differentiation

By leading in stablecoin adoption, JPMorgan and BofA position themselves ahead of fintech rivals. Clients value banks that offer familiar regulatory cover plus blockchain benefits. Early launch of dollar tokens lets these banks capture corporate wallets before pure-play crypto firms or Big Tech move in. This edge reinforces existing client relationships and attracts new customers seeking secure, compliant digital payment solutions. With stablecoin rails, banks can package new products like tokenized deposits or yield-bearing accounts to deepen revenue streams.

JPMorgan’s Onyx Platform and Stablecoin Innovation

JPMorgan’s Onyx platform is the bank’s blockchain arm powering its JSTablecoin project. Initially introduced as a proof of concept, it operates on a permissioned ledger that issues dollar-backed tokens supported by short-term U.S. Treasury assets. The system integrates with existing banking APIs, letting corporate clients convert cash balances into tokens for instant settlement across accounts and geographies. Onyx tests include treasury netting, repo trades, and interbank settlements. By 2025, JPMorgan plans to open Onyx rails to external partners, enabling a wider stablecoin network for real-time liquidity management.

Here are the key features of JPMorgan’s Onyx Platform:

Permissioned Network: Onyx uses a private blockchain where only approved nodes can validate transactions. This control ensures data privacy, compliance with bank secrecy laws, and network security. Nodes include JPMorgan branches and select corporate clients. Permissioned access also allows the bank to implement KYC at the protocol level, speeding up onboarding while meeting global AML standards. With this model, Onyx balances decentralization benefits with required oversight for financial institutions.

⦁ Treasury-Backed Collateral: Every token minted on Onyx is fully backed by short-term U.S. Treasuries held in segregated accounts. This design ensures price stability and regulatory alignment. Clients can audit reserve reports daily, verifying that tokens remain 1:1 with government notes. By using high-quality liquid assets, JPMorgan maintains a low risk profile and meets potential capital requirements under emerging stablecoin regulation. This collateral model sets a robust template for other banks’ stablecoin development projects.
⦁ API Integration: Onyx offers RESTful APIs connecting token operations with existing treasury management systems. Corporations can programmatically mint, transfer, or redeem tokens directly from their ERP or trading platforms. Real-time balance checks and transaction confirmations feed back into client dashboards, enabling automated reconciliation and straight-through processing. This tight integration accelerates adoption among tech-savvy corporate treasurers.
⦁ Compliance-First Design: JPMorgan built Onyx to meet evolving stablecoin regulation. Smart contracts include built-in KYC/AML checks and transaction limits. Any transfer triggers identity verification using standard banking protocols. The platform logs all activity for audit trails, satisfying regulatory reporting requirements. By aligning with the Fed’s guidelines for digital assets, Onyx aims to secure conditional approvals from regulators, paving the way for mainstream use in corporate and interbank markets.
⦁ Scalability Roadmap: Onyx is engineered to handle thousands of transactions per second, matching existing payment networks. The platform uses sharding and parallel processing to scale across regions. Future upgrades include cross-chain bridges to public networks for broader interoperability. By integrating with other banks’ ledgers, Onyx could become the backbone of a new real-time, global settlement layer. This vision underscores JPMorgan’s drive to lead in bank-issued digital currency solutions.

Bank of America’s Approach to Stablecoin Integration

Bank of America is developing its own dollar-pegged token, pending regulatory green lights. CEO Brian Moynihan has stated that BoA will launch a stablecoin once rules are clear. The bank’s focus is on a fully licensed, bank-chartered model where tokens represent deposits on its balance sheet. Early pilots include tokenized money market operations and wholesale payments via its Digital Assets group. BoA invests over $4 billion annually in tech, positioning it to build secure token infrastructure and integrate coins into its existing cash management suite.

The New Approach of Bank of America to Stablecoin Integration:

Chartered Issuer Model: BoA plans to issue its token under a banking charter, meaning every token is a direct claim on the bank’s deposit book. This model contrasts with non-bank issuers that rely on custodians. A chartered approach simplifies regulation, as BoA falls under standard banking oversight. Clients gain FDIC-style protections under proposed stablecoin rules. This in-house design gives BoA full control over minting, reserves, and audit processes.
Pilot Use Cases: Current tests include tokenized money market funds and real-time wholesale transfers between BoA branches. In pilots, treasury clients convert cash sweeps into tokens for instant internal settlement. This reduces intraday borrowing needs and trims daylight overdraft fees. Early results show a 50% cut in funding costs. BoA plans to expand pilots to cross-border corporate payments by pairing tokens with forex smart contracts.
Tech Stack: Bank of America uses a private DLT network based on Hyperledger Fabric. The network supports modular chaincode for token logic and compliance checks. BoA’s Digital Assets team built custom smart contracts to enforce reserve ratios and KYC on mint/redemption. Integration with existing payment gateways ensures clients can manage tokens alongside wire transfers and ACH, all from a single treasury portal.
Partnerships & Interoperability: BoA is in talks with other banks and fintechs to join its token network, aiming for a shared ledger. Interoperability bridges would link BoA tokens with other bank-issued coins and top 10 stablecoins like USDC and Tether. By fostering a multibank ecosystem, BoA hopes to drive network effects, expand transaction volume, and lower entry barriers for corporate users seeking digital rails.
Risk Controls: Strong governance underpins BoA’s plan. Token operations will be overseen by a dedicated board with internal audit, risk, and compliance representatives. Smart contracts include throttles to limit daily minting and redemption. Automated alerts flag anomalies, feeding into the bank’s existing risk platform. This layered control approach ensures tokens comply with both BoA’s policies and emerging federal stablecoin regulation.

Regulatory Support and the GENIUS Act’s Role

1. Clear Legal Framework

The GENIUS Act aims to set detailed rules for stablecoin issuance, requiring issuers to hold reserves in cash or short-term Treasuries. This clarity reduces legal uncertainty for banks exploring token issuance. Under the bill, regulated entities like banks and trust companies can issue coins without seeking new approvals. Issuers must maintain separate reserve accounts and publish monthly attestation reports. Retail use of stablecoins gains credibility as consumers see 1:1 backing. Clear rules also speed up USDC adoption by defining it under existing securities laws, encouraging more financial institutions to join the market.

2. Consumer Protections

GENIUS mandates issuers to redeem tokens on demand at face value, protecting users from “run” scenarios. It also requires disclosures on reserve composition and redemption procedures. Banks must offer dispute resolution channels and maintain insurance on reserve accounts. These provisions help retail use of stablecoins by giving individuals confidence that tokens function like bank deposits. Greater protection fosters wider USDC adoption among wallets and exchanges. By treating stablecoins similar to demand deposit accounts, the Act encourages banks to integrate digital tokens into consumer banking apps.

3. Regulatory Oversight

The Act grants the Treasury and FDIC authority to inspect stablecoin issuers, ensuring ongoing compliance. Issuers face penalty fees for reserve shortfalls or reporting lapses. This oversight aligns with bank exam cycles, allowing regulators to monitor token operations alongside traditional balance sheet items. Stablecoin adoption by banks accelerates under this regime, as compliance burdens match existing bank processes. With regulators on board, banks can launch programs knowing they meet federal standards. Strong oversight also deters bad actors, boosting market confidence and encouraging further USDC adoption by institutional and retail participants.

4. Cross-Border Harmonization

GENIUS encourages international cooperation by setting model rules banks can follow abroad. It proposes memorandums of understanding with other central banks to align on reserve requirements and audit standards. This paves the way for global stablecoin use in trade finance and remittances. As U.S. banks expand token networks overseas, consistent rules reduce friction and legal risk. This global approach underpins retail use of stablecoins for cross-border payments and broadens opportunities for crypto adoption by enterprises worldwide.

5. Innovation Incentives

The GENIUS Act features pilot programs that enable banks to trial new stablecoin functionalities within regulatory “sandboxes.” These sandboxes allow issuers to explore programmable wallets, privacy settings, and advanced compliance mechanisms. Insights from these pilots inform future rulemaking. By lowering barriers for experimentation, regulators fuel stablecoin adoption by banks and fintechs. Banks can refine products before full launch, reducing technical and legal risks.

What This New Stablecoin Adoption Means for the Future of Banking and Crypto

1. Blockchain-Native Payments

As stablecoin adoption grows, banks will offer blockchain-native payment rails alongside ACH and SWIFT. Clients will choose token transfers for speed and cost savings. Banks will integrate token rails into mobile and corporate portals, making crypto adoption seamless. This shift transforms treasury operations, letting clients settle trades, payroll, and vendor invoices instantly on a single platform. Legacy and digital rails converge, giving banks a competitive edge and setting a new standard for corporate cash management in 2025.

2. New Revenue Streams

Token issuance and transaction fees create fresh income lines beyond interest spreads. Banks can charge for minting, redemption, FX swaps, and treasury-as-a-service features. Programmable tokens open revenue from embedded finance, automatic payments tied to contract events. As transaction volumes rise, fees scale. Banks also monetize value-added data services, offering clients analytics on token flows and liquidity metrics. These offerings drive higher client engagement and cross-sell opportunities, making stablecoin adoption a profitable venture tied directly to growing crypto adoption by enterprises.

3. Improved Risk Management

On-chain tokens give real-time visibility into collateral and cash flows, improving risk controls. Banks can set automated triggers to rebalance reserves and hedge exposures instantly. Smart contracts enforce compliance rules at execution, reducing manual oversight. Enhanced monitoring tools alert risk teams to unusual token movements. These capabilities strengthen overall bank risk frameworks and support regulatory reporting. With better data granularity, banks can optimize capital usage and lower operational losses. Greater confidence in on-chain assets further spurs crypto adoption, as institutions trust token systems for critical financial operations.

4. Wider Ecosystem Collaboration

Joint stablecoin networks foster collaboration among banks, fintechs, and regulators. Shared ledgers and open standards reduce siloed architectures, enabling seamless transfers across institutions. Banks can pool reserves for liquidity, aggregate demand, and drive network effects. Fintech partners offer specialized services, wallets, audit tools, and front-end apps – integrating with bank tokens. This collaborative model expands use cases beyond payments into supply-chain finance and insurance. As ecosystem players unite, the line between traditional finance and crypto blurs, accelerating crypto adoption across industries.

5. Mainstream Digital Assets

With regulated banks leading stablecoin issuance, digital assets gain broader trust. Retail and institutional clients gravitate toward coins backed by recognized financial institutions. This shift reduces volatility concerns tied to unregulated tokens. Banking apps will feature token wallets alongside deposit and lending services. Over time, tokenized assets like bonds, equities, and commodities, can run on the same rails. As stablecoin adoption becomes mainstream, the foundation is set for a fully digital financial ecosystem where crypto adoption is no longer niche but integral to daily banking.

Conclusion

2025 marks the year legacy banks fully embraced stablecoin adoption, blending crypto speed with banking trust. JPMorgan’s Onyx and Bank of America’s chartered token plans prove that digital dollars are now core payment rails. Regulatory clarity via the GENIUS Act and USDC adoption furthers retail use of stablecoins, opening new markets. For businesses and developers, there’s no better time to join this revolution, especially as the cost of stablecoin development continues to be feasible, making it more accessible than ever.

Shamla Tech is a top stablecoin development company offering the best stablecoin development services. We’ve built secure, compliant stablecoins for clients worldwide, enabling faster, cheaper transactions and seamless integration into existing finance systems.

FAQs

1. What is the GENIUS Act?

The GENIUS Act is a U.S. bill aiming to regulate stablecoins by setting clear rules to protect users and ensure transparency in how these digital coins work and are backed.

2. How are banks using stablecoins for cross-border payments?

Major banks mint dollar-backed tokens on ledgers to move funds internationally in seconds. These tokens bypass SWIFT rails, cut fees, provide full on-chain audit trails, ensuring faster settlement and simpler compliance.

3. What is JPMorgan’s Onyx stablecoin platform?

Onyx is JPMorgan’s blockchain platform for issuing dollar tokens backed by Treasury bills. It integrates with APIs, enforces on-chain KYC, supports instant minting, transfer, redemption, and secure real-time balance tracking.

4. How does Bank of America plan stablecoin integration?

Bank of America will issue dollar tokens under its charter, making each token a deposit claim. It ,akes use of Hyperledger Fabric, integrates KYC directly into the chaincode, and is testing tokenized money markets along with wholesale settlement processes.

5. What are the risks of bank-issued stablecoins?

Bank-issued stablecoins face operational risks from smart contract bugs, reserve mismanagement, network outages. They also risk regulation changes affecting issuance, plus liquidity strains if redemptions spike, requiring robust risk controls.