A planned US dollar stablecoin backed by 21 financial institutions could generate returns through independent decentralised finance (DeFi) protocols, but holders would take on risks not covered by the issuing banks, Katana chief executive Matt Fisher has said.
The institutions intend to launch the stablecoin in the first half of 2027, after establishing a new company during the second half of 2026, subject to closing conditions. Bank of America, Citi, Goldman Sachs, UBS and 17 other firms announced the plan on 1 September.
The unnamed venture could later issue tokens linked to other G7 currencies, with a euro stablecoin identified as its first expansion priority. The dollar token is intended for wholesale, institutional and retail use, including cross-border payments and digital asset settlement.
North American participants are Fidelity Investments, Capital One, Wells Fargo, PNC Financial Services, Scotiabank, TD Bank Group, WisdomTree, Bank of America, Citi and Goldman Sachs. European members are Banco Santander, BBVA, Commerzbank, Credit Agricole, Deutsche Bank, Lloyds Banking Group, Rabobank and UBS. MUFG Bank, Sirius International Holding and Standard Bank complete the consortium.
The group says the project will comply with the GENIUS Act and, where relevant, the European Union’s Markets in Crypto-Assets regulation. It has not yet disclosed the stablecoin’s name, supported blockchains, reserve custodian, governance arrangements or redemption terms.
Under the GENIUS Act, permitted payment stablecoin issuers cannot pay interest or yield directly to holders. The framework requires eligible tokens to be backed one-to-one by approved liquid reserves and includes disclosure, redemption and insolvency protections. Such stablecoins are not FDIC-insured deposits.
Fisher told crypto.news that the restriction applies to permitted issuers rather than necessarily limiting what holders do with their tokens after receiving them. He stressed that this was a market-structure interpretation, not legal advice.
“The yield comes from what the cash is lent against, not from the bank that minted it,” Fisher said.
He said an independent protocol could lend stablecoins to identifiable borrowers, finance market-maker inventory or support overcollateralised loans. In that structure, the bank would issue the dollar token while a separate venue put it to work, similar to the distinction between a bank deposit and a money-market fund.
The sustainability of the return would depend on its source. Interest paid by a borrower would reflect genuine demand, whereas rewards funded by repeatedly issuing a protocol’s governance token would be a subsidy. Katana’s VaultBridge protocol is designed to direct stablecoins towards lending demand, although Fisher’s comments about it were based on Katana’s own description rather than an independent assessment.
The issue has become part of a wider US policy debate. In January, American community bankers objected to indirect yield paid through exchanges and other third parties, arguing that such incentives could draw deposits away from local lenders.
Fisher said treasurers should identify who is paying to use a stablecoin, assess why the borrower needs the funds and examine whether the rate changes with dollar supply and demand. A fixed annual percentage yield may instead depend on a temporary incentive. If the return disappears when token rewards stop, it may represent a subsidy rather than income from underlying activity.
He also warned that using DeFi introduces risks absent from simply holding a payment token. Smart-contract exploits, inaccurate or manipulated oracles, insufficient liquidity, failed lending strategies and counterparty problems could all cause losses. Self-custody may leave users without chargeback or customer-service support after an incorrect transaction or loss of access.
Even a protocol showing sufficient assets for normal withdrawals may be unable to provide redemptions at par during a rush to exit. Audited code, liquid markets and conservative collateral can reduce some risks, but do not create a bank guarantee.
Jiko’s 2026 Corporate Cash Confidence Survey, conducted from 13 April to 19 June among 192 treasury professionals, found that nearly half left more than 10% of corporate cash uninvested at any time, while 23% regularly kept more than one-quarter idle. Access to cash was the leading priority for 60% of respondents, followed by risk control and protection of principal at 46%; yield ranked lower.
Fisher said DeFi had not solved the problem of unproductive digital dollars. DefiLlama recorded about $305.3bn in stablecoins and roughly $87.6bn in DeFi total value locked when the figures were reported, meaning much of the stablecoin supply remained outside deposited DeFi capital.
Companies considering such arrangements would need transparent economic activity, predictable liquidity, conservative collateral, real-time reporting, round-the-clock settlement and counterparties able to operate during market stress.
“Most treasurers underwrite the yield and inherit the redemption path by accident,” Fisher said. “Corporate users should test stressed exit conditions rather than relying on the liquidity a protocol displays during normal trading.”
