The next big player in programmable money—banks | #329
Also, Trump continues his war with the Federal Reserve
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This week:
The next big player in programmable money—banks
Banking associations wary of crypto firms getting trust charters
Crypto trade groups react to JPMorgan’s “closed banking” strategy
Tether responds to the GENIUS Act
What we’re reading: Trump’s war with the Fed
Stuff happens
1. The next big player in programmable money—banks
The latest from Everest Group highlights how regulated institutions, in particular, banks “are redefining their role in the digital asset ecosystem” (via Thomas Milkey):
Powered by blockchain but governed by traditional financial safeguards, programmable deposit tokens enable money to flow like software: 24/7, conditional, transparent, and integrated with business logic.
For enterprises and financial institutions, this shift is not just technological, it’s strategic. It alters how liquidity is managed, how products are designed, and how value moves across global networks.
A key driver of this shift will be tokenized deposits:
A key signal of this shift is JPMorgan’s launch of JPMD, a tokenized bank deposit issued on Coinbase’s public Base blockchain. Unlike earlier experiments such as JPM Coin, JPMD operates on a public network while retaining regulatory safeguards. Each token represents one U.S. dollar on deposit, combining the programmability of blockchain with the trust of a commercial bank. Notably, JPMD may eventually offer features like deposit insurance and interest benefits not typically associated with crypto-native stablecoins.
This transition isn’t limited to JPMorgan. Globally, FinTechs such as Circle and Paxos in the U.S., Monerium in Europe, and Partior in Asia are helping enterprises scale programmable money. These players are not just filling infrastructure gaps, they’re enabling banks and corporates to operationalize tokenized liquidity across treasury, settlement, and payments.
While stable coins such as USDT and USDC solved critical issues around real-time cross-border payments, their architecture falls short for enterprise use. Institutions evaluating tokenized money identified four key limitations: legal enforceability, compliance alignment, counterparty clarity, and integration with enterprise systems.
This created space for regulated banks to lead a second wave one that brings blockchain-based speed and programmability under the guardrails of traditional finance. Banks issuing deposit tokens combine regulatory assurance (e.g., deposit insurance, clear claims) with tokenized flexibility. Ongoing pilots from Citi, HSBC, UBS, and Deutsche Bank reflect this strategic shift. Even large enterprises like Amazon and Walmart are considering stablecoins for payments, underscoring how programmable digital money is fast becoming a mainstream enterprise priority.
2. Banking associations wary of crypto firms getting trust charters
Here’s Banking Dive:
In a major pushback against the cryptocurrency industry’s banking ambitions, the American Bankers Association and four other bank trade groups have urged the Office of the Comptroller of the Currency to postpone decisions on several national trust bank charter applications.
The joint letter sent July 17 comes in response to a slew of applications filed since April 2025 by crypto firms, including Fidelity Digital Assets, Ripple, Circle, and National Digital TR CO – all seeking specialized banking charters that would grant them federal recognition and more simplified regulatory oversight.
The ABA, America’s Credit Unions, Consumer Bankers Association, Independent Community Bankers of America and National Bankers Association argued that the public portions of the applications lack sufficient information for meaningful public scrutiny and that more transparency is needed about the applicants’ business plans.
“Given these substantial concerns, and the policy, legal, and commercial implications that chartering the Applicants would have for the banking system, the Associations urge the OCC to postpone consideration of the Applications,” the trade groups wrote. “The delay should continue until such time as the OCC has released enough information concerning the Applicants’ intended business plans, as well as other aspects of the Applications, to inform the public’s review and interested stakeholder comment, consistent with the historical transparency of the OCC’s charter application review process.”
3. Crypto trade groups react to JPMorgan’s “closed banking” strategy
Meanwhile, crypto trade groups set their sights on one of the biggest banks around (via Greg Kidd).
Here’s Coindesk:
Ten of the largest trade associations in fintech and crypto have called on President Donald Trump to intervene in what they say is a coordinated attack by big banks to stifle innovation and lock out competitors.
In a letter sent on Wednesday, the groups, which include the Blockchain Association, and the Crypto Council for Innovation, warned that JPMorgan’s plan to charge fees for access to consumer banking data threatens to de-bank millions of Americans and could cripple the adoption of stablecoins (USDC, USDT) and self-custody wallets.
At the center of the fight is how Americans fund digital wallets and exchanges. Aggregators like Plaid and MX enable consumers to transfer funds from their bank accounts to platforms like Coinbase or Kraken. These connections rely on direct access to user-permissioned data.
Until now, banks have allowed that access without charging fees. However, JPMorgan has begun informing aggregators that they’ll need to pay for it—reportedly up to $300 million per year for Plaid alone which would amount to more than 75% of company's revenue.
"Let us be clear: financial data belongs to the American people, not the banks," the letter reads. "By challenging open banking, the largest banks stand in direct opposition to your vision of making America the financial innovation capital of the world."
4. Tether responds to GENIUS Act
Here’s Tether CEO Paolo Ardoino speaking to Bloomberg:
Yes, we are well in progress in establishing our US domestic strategy. It’s going to be focused on US institutional markets, providing an efficient stablecoin for payments, and also for interbank settlements and trading. That is well under way and we plan on announcing it in the next couple of months. This venture, as well as our foreign issued stablecoin USDT, will be under the GENIUS Act.
5. What we’re reading: Trump’s war with the Fed
Here’s the New Yorker:
Since taking office for a second time in January, Trump has repeatedly criticizedPowell, whom he appointed in 2017, and his agency for not cutting interest ratesquickly enough. “Numbskull,” “moron,” and “Mr. Late” are some of the epithets hehas used. Thus far, Trump has held back from trying to fire Powell, whose termruns until next May. But, in verbally attacking him and demanding policy changes,he is following the playbook of other populist authoritarians, including Hungary’sViktor Orbán and Turkey’s Recep Tayyip Erdoğan. In 2018, Erdoğan issued aPresidential decree giving him the power to dismiss the governor of Turkey’scentral bank. Between 2019 and 2024, he forced out four governors who had chafed at his demands for low interest rates regardless of soaring inflation. The reasons strongmen clash with central-bank chiefs aren’t hard to discern: They often come to power promising to improve the livelihoods of their supporters by boosting employment and reducing the cost of living. But an independent central bank denies them control of one key tool for stimulating the economy quickly—the ability to cut interest rates. Moreover, to any self-respecting strongman, the very notion of an independent power center is offensive, especially one that is expressly designed to take key policy decisions out of the political realm. Conflict is virtually guaranteed.
…
“In all of these countries where there are populist pressures, what really matters is whether you have strong institutions or not,” she said. Ever since 1951, when theTreasury Department and the Fed reached an agreement that allowed the central bank to set interest rates independently, Presidents have generally respected that autonomy, although some of them, most notably Richard Nixon, have privately leaned on Fed chairs to lower interest rates or keep them low. What sets Trump apart is the intensity and transparency of his pressure campaign, and his personal attacks. During his first term, despite having recently appointed Powell, Trump repeatedly criticized him, calling him clueless and claiming that the Fed posed a bigger threat to the U.S. economy than China did. Indeed, Demiralp and her co-authors found that Trump rebuked the central bank more frequently thanErdoğan did. “But in the markets the reaction was much less evident,” she noted.“Markets essentially assumed that the Fed was not going to give in to him.”