The largest banks are moving ahead with stablecoins. JPMorganChase was first with JPM Coin, which is pegged to the U.S. dollar and used to process $1 billion of payments daily. Bank of America has said it’s planning to offer a fiat-backed stablecoin. Citi already has digital tokens it uses to transfer money internally across geographies; it is said to be considering issuing its own stablecoin as well. Many smaller banks laid plans for bitcoin custody a few years ago; those plans were kiboshed by regulators, and the banks remain gun-shy. Executives at Pathward and KeyBank both said their customers are asking about digital assets. “We’ve seen a lot of demand for stablecoin, especially as it relates to business to business and business to consumer payments, especially cross border use cases,” said Will Sowell, divisional president of banking as a service at Pathward Bank. “Our approach has been to build on ramps and off ramps for that. As a sponsor bank, there’s a large opportunity to participate.” KeyBank’s clients have expressed interest in a variety of digital currencies. Mostly they want KeyBank to hold those assets, according to Bennie Pennington, senior vice president, embedded finance at KeyBank. Leaders at Royal Business Bank and Piermont Bank struck a more cautious note. “We are monitoring the digital asset space,” said Rodrigo Suarez, chief banking officer at Piermont Bank. “We’re not necessarily planning anything specific right now. We need to make sure that what we’re doing is relevant, but not necessarily just following a trend.” Gary Fan, chief operating officer at Royal Business Bank, also said his bank is monitoring the digital asset space. “We have to see how the regulatory agencies play out,” Fan said. “We do have the regulatory agencies above us, and more or less those people are uncomfortable. It’s very, very difficult for us to enter new areas like that. For us specifically, we’re looking at it, but it’s probably not one of the top one or two priorities that we’re going to work on in the next 12 months.” Dara Tarkowski, managing partner at Actuate Law, said a wait-and-see approach makes sense from a legal perspective. “When you have a lack of a true regulatory framework, and you still have states breathing down your neck, banks need to always go to find their own true North Star,” she said. Banks need to go back to safety and soundness principles, and create policies and procedures that will safeguard customers, she said.