What are the stablecoins that financial giants are competing for, from JPM Coin to USDC?

Stablecoin

In the wave of digital assets, stablecoins have jumped from a marginal role in the cryptocurrency market to become a core bridge connecting traditional finance and the digital future. As Wall Street giants join the fray, what we see is no longer a small-scale financial experiment, but a strategic positioning battle concerning future payments, settlements, and even the global financial landscape.

From JPM Coin by JPMorgan to the comprehensive embrace of USDC by payment giant PayPal, and the quiet layout by BlackRock, each move signifies the arrival of a new era. Today, we will delve into why these financial giants have collectively "fallen in love" with stablecoins, examining their strategic logic, application scenarios, and future trends.

Why are financial giants competing?

• Cross-border payments arrive in seconds: what used to take days is now done in minutes!
• Transaction fees plummet: intermediate steps reduced, costs drop by 80%!
• Digital Finance Cornerstone: Paving the Way for Future Digital Currencies and Blockchain Ecosystems
• User Stickiness MAX: Payment + Investment + Cross-border Trading All-in-One

JPM Coin: The "Internal Settlement Tool" of Banking Giants

As the first bank on Wall Street to take the plunge, JPM Coin from JPMorgan Chase has had a clear positioning since its inception in 2019 - an internal settlement network specifically designed for enterprise-level clients.

JPM Coin is strictly pegged to the US dollar at a 1:1 ratio and operates on its private Onyx blockchain network. It is not a publicly issued cryptocurrency but a "digital dollar" provided by JPMorgan for its corporate clients, used for instant payments and settlements on a global scale.

The success of JPM Coin is not only in reducing the cost of cross-border settlement, but more importantly, it provides an excellent platform for JPMorgan to test the real potential of a "digital dollar" and lays a solid foundation for future access to the CBDC network.

PayPal & USDC: The "Retail Payment Revolution" of Tech Giants

If JPM Coin represents the "elite route" of banks, then PayPal's embrace of USDC has sounded the horn for stablecoins to advance into mainstream retail payments.

PayPal does not issue its own stablecoin but has chosen to collaborate deeply with USDC, which is issued by Circle and has a very high market reputation. Users can buy, sell, hold, and use USDC for payments directly within PayPal and its subsidiary app, Venmo.

PayPal has a massive user base of over 400 million, and its support for USDC has greatly promoted the adoption and implementation of stablecoins. This move not only solidifies PayPal's leading position in the digital payment sector but also sets a benchmark for technology companies on how to safely and compliantly enter the stablecoin space.

BlackRock: The "Efficiency Optimizer" of Asset Management Giants

As the world's largest asset management company, BlackRock has a broader perspective, viewing stablecoins as a key tool for optimizing financial market infrastructure and enhancing asset management efficiency.

In traditional securities trading, clearing and settlement (T+2) usually takes two days. However, through tokenized cash or securities instruments, transactions can achieve atomic settlement with "cash on delivery", greatly reducing counterparty risk and capital in transit. For BlackRock, which manages trillions of dollars in assets, this means an exponential increase in efficiency and security.

Citi / Standard Chartered: Exploring the Future of "Experimental Pioneers"

International banks such as Citi and Standard Chartered are also actively conducting internal stablecoin experiments, aiming to explore broader enterprise-level applications and future interoperability with CBDCs.

These bank projects, such as Citibank's "Citi Token Services," focus on corporate cross-border payments, trade financing, and digital asset clearing. They test more complex financial scenarios within internal networks by simulating the issuance of stablecoins pegged to various fiat currencies, such as automated supply chain financing driven by smart contracts.

The ultimate goal of these experiments is to establish a global digital settlement network that can seamlessly connect the central bank digital currencies (CBDCs) of various countries. When the era of CBDCs arrives, these banks will leverage their mature technology and operational experience to become the core hub connecting public infrastructure and commercial applications.

Regulatory Trust

Regulatory challenges: Stablecoins, especially those aimed at retail users, face extremely strict financial regulations. Meta's Diem (formerly Libra) project ultimately stalled due to a united "siege" by global regulators, which is a profound lesson.

Trust and Security: The "stability" of stablecoins comes from the transparency and reliability of their underlying assets. Any doubts regarding the reserve assets can lead to a crisis of trust. At the same time, as a system that operates 24/7, its technical security and ability to prevent vulnerabilities are crucial.

Core Conclusions

Stablecoins have evolved from a "crypto-native" concept to a core pivot of digital strategies for financial giants. Banks are leveraging them to reshape the underlying logic of corporate settlements, reducing costs and increasing efficiency. Tech companies hope to create a borderless retail payment loop with it, targeting billions of users. Investment institutions are focused on optimizing the trading and settlement efficiency of the entire financial market.