US banking groups form alliance for their own blockchain

Thirty-nine state banking trade groups formed the BankChain Alliance to develop a shared blockchain network for community and regional banks. The alliance announced the proposed network on Tuesday. The network targets a 2027 launch. The network would support tokenized deposits, stablecoins, programmable payments, and automated settlement for thousands of U.S. financial institutions. The alliance said the network would help banks of all sizes offer blockchain-based services while maintaining existing regulatory standards. The alliance said banks would be able to own the network. The alliance has not selected a technology provider or named a blockchain. The alliance has not disclosed its architecture, interoperability, governance model, regulatory framework, or participating banks. The alliance also has not explained how tokenized deposits and stablecoins would be issued and settled. Kathy Kraninger, interim chair of the BankChain Alliance and president and CEO of the Florida Bankers Association, said the network would be industry-built and industry-owned. Participating associations represent banks in Texas, Florida, Georgia, the Carolinas, Pennsylvania, Massachusetts, Michigan, Wisconsin, Washington, and Oregon. The coalition also includes associations from Maine, Vermont, Hawaii, Idaho, North Dakota, South Dakota, and Wyoming. The Ohio Bankers League represents Ohio, while the other participants are state bankers associations. In October, Custodia Bank and Vantage Bank Texas introduced an interoperable tokenized-deposit platform for U.S. banks. The following month, JPMorgan launched its JPMD deposit token on Base for institutional clients. JPMorgan planned to expand JPMD to other networks and currencies. In January, BNY announced a private, permissioned platform for tokenized deposits. BNY initially intended the platform for collateral and margin transactions. In July, Swift said 17 global banks would test tokenized-deposit transfers outside traditional banking hours.