A group of 39 state bankers associations has founded the BankChain Alliance to establish a blockchain network owned and controlled by commercial banks. The initiative is designed to ensure that small banks and their clients rely on regulated banking institutions for on-chain finance rather than independent crypto firms and stablecoin products.
Leadership behind the alliance includes Locality Bank co-founder and Chief Technology Officer Corey LeBlanc, Utah Bankers Association executive director Howard Headlee, and Florida Bankers Association head Kathy Kraninger, who previously served as director of the Consumer Financial Protection Bureau.
According to LeBlanc, the initiative aims to counter the oligopoly of core software providers like Fiserv, FIS, and Jack Henry, which often dictate terms and force smaller banks into lengthy contracts or long waiting periods for new technology. Modelled partly on the Federal Home Loan Banks, the BankChain network will allow participating banks of all sizes to have a vote and direct control over network development. The alliance has completed a request-for-proposal round and targets a launch in 2027.
The alliance enters an increasingly busy sector of bank-led blockchain projects. Other market participants include the Cari network led by Eugene Ludwig, Hazel developed by Caitlin Long and Jeff Sinnott, a stablecoin project by Vast Bank and Uphold, a tokenized-deposit network by The Clearing House, and Swift's blockchain ledger, which recently completed a transaction between HSBC and Standard Chartered.
The Clearing House announced backing from major institutions including Bank of America, Citi, BNY, and HSBC for a tokenized-deposit network slated to go live in early 2027. This development follows concerns over stablecoins siphoning traditional bank deposits.
Regulatory factors are playing a significant role in motivating banks to develop their own infrastructure. An analysis by the Federal Reserve Bank of Dallas noted that tokenized deposits register actual bank deposits on a blockchain, remain within the traditional banking system, and can pay interest, distinguishing them from stablecoins that operate partly outside established regulatory frameworks.
BankChain also intends to address traditional banking challenges using smart contracts. Jim Kisch, CEO of Passumpsic Bank, highlighted programmable payments as a tool to prevent elder fraud by introducing verification steps before unusual transactions clear.
While BankChain leaders expect multiple banking blockchain networks to coexist, making interoperability essential, the primary objective remains giving banks direct ownership over the infrastructure powering tokenized deposits and digital money.
