By the time of Sibos 2025, banks and policymakers seemed to agree: digital money will be part of the operating models of traditional finance. The question now is how to make it happen.
The urgency comes from a structural shift already under way. For the first time in regulated finance, value can meaningfully cross borders without banks. Virtual asset service providers are already moving stablecoins from Singapore to São Paulo without correspondent banks.
We are helping banks navigate both the opportunities and the threats. Some are testing third-party stablecoins to meet client demand for real-time settlements. Others are designing their own bank-backed tokens to retain control of deposits and standards. A growing number are exploring tokenized deposits to upgrade core infrastructure without changing its regulatory treatment.
Approaches vary, but the direction is consistent: toward interoperable digital money networks that operate securely, continuously, and under full regulatory oversight.
For transaction banks, this shift is not about competing with virtual-asset service providers but about reclaiming settlement and liquidity flows on new rails. The opportunity is to deliver client services with the same regulatory assurance, but at digital speed.
Strategic Pathways for Stablecoin and Tokenized Deposit Adoption
We have worked with more than 80 banks over the past six years, and one thing is clear: there is no single route for banks to introduce digital money.
This is not an either-or decision, nor is it necessarily sequential. Most institutions will combine more than one model as client needs, corridors, and regulations evolve.
What matters most is having an entry route that lets banks deliver client-facing blockchain-enabled transaction services today, retaining flexibility for future roadmap initiatives that are not yet fully defined. For example, a bank might start by enabling clients to accept collections in USDC, creating the foundation for real-time invoice financing and tokenized receivables discounting in the future.
Across the market, we see transaction banks considering three broad paths forward:
| Model | Control | Speed to Market | Deposit Flow Impact |
| Third-party stablecoin | Low: the issuer and network operator control reserves, governance, and issuance | Fast: banks can quickly integrate existing stablecoins to meet client demand | Limited: off balance sheet, but less influence over liquidity management |
Bank or consortium-issued stablecoin | Medium to High: banks retain shared or direct control over issuance, reserves, and standards | Moderate to Slow: consortium requires inter-bank coordination and both require regulatory engagement and operational setup | Mixed: depends on issuing vehicle whether it stays in-house |
Tokenized deposits | High: banks retain full control within existing prudential frameworks and core banking systems | Fast: when the right infrastructure partner brings existing deposits onchain | High: remains on balance sheet, impacting capital treatment directly |
Each option carries its own trade-offs in time to market, operational complexity, and commercial impact. Together, they form a roadmap for how banks can modernize transaction services and remain central to the movement of digital value.
Using Third-Party Stablecoins to Enable 24/7 Settlement
Some institutions are integrating existing stablecoins into their platforms, such as Circle’s USDC. These tokens, typically issued by regulated fintechs or consortia, allow banks to facilitate real-time cross-border payments when traditional rails are closed.
Connecting to an existing stablecoin issuer offers immediate benefits. Banks can meet client demand for around-the-clock settlement without building out ecosystem capabilities such as issuance and on/off-ramping. Several regional and fintech-aligned institutions already enable clients to send and receive USD over stablecoin networks outside standard settlement windows.
This approach also has limitations. By relying on an external issuer, a bank inherits its counterparty, governance, and control frameworks. The stablecoin may not be redeemable at par in a stress event, and the institution may have limited influence over compliance or reserve management.
For some institutions, the risk-return profile makes third-party stablecoins a tactical bridge—an opportunity to learn client behaviour, test corridors, and prepare internal processes before issuing or tokenizing their own liabilities. These early integrations help banks understand where clients truly need 24/7 settlement and how to operationally support it.
Bank-Issued Stablecoins: Enabling Controlled Innovation
For banks seeking greater control, especially those active in fiat clearing, issuing a fiat-backed digital token is a natural next step. Unlike third-party models, a bank-issued stablecoin can be issued in-house or as part of a consortium.
Such stablecoins are commonly issued through bank-remote entities within a financial group, as seen with Wenia in the Bancolombia group, or directly by a bank, as with Banking Circle.
The appeal is both strategic and practical. By issuing their own stablecoin and managing on- and off-ramp services for deposit holders, banks can extend existing trust into digital channels, speed up settlement, and keep the yield from reserve assets. Operational control stays within the bank rather than a fintech issuer and the stablecoin can be minted or redeemed on demand from a tokenized deposit for payment purposes.
This approach allows the bank to manage reserves, redemption, and disclosure standards directly, extending existing governance to a digital form. In doing so, the institution can offer programmable money and embedded-finance services without ceding client relationships to external issuers.
We see this emerging across multiple markets:
- Australia: ANZ’s A$DC has enabled large-value corporate transfers in minutes, proving that a regulated stablecoin can operate within existing prudential frameworks.
- Colombia: Bancolombia’s $COPW facilitates real-time local-currency settlement, giving clients 24-hour access to funds previously constrained by local clearing hours.
- Europe: In October 2025, ODDO BHF launched EUROD, a MiCA-compliant, euro-backed stablecoin designed as an alternative to U.S. dollar-backed stablecoins.
- Japan: SMBC and other institutions are exploring yen-denominated stablecoins under the revised Payment Services Act to support cross-border and after-hours payments.
Banks differ in their approaches, but many, such as SG-Forge, allow non-customers to hold their stablecoins, extending reach beyond existing client bases.
Governance, scale, interoperability, and capital efficiency are the principal challenges:
- Bank-issued stablecoins require a dedicated technology stack for reserve management, minting and burning.
- They require a dedicated set of regulatory permissions.
- In all jurisdictions, they must be backed 1-1 with cash or high-quality liquid assets, limiting banks’ ability to perform traditional maturity transformation or generate net-interest income.
- The ability of banks to interact with permissionless ledgers hits regulatory friction, which can limit distribution and interoperability.
Nonetheless, for banks with strong domestic franchises and active corporate clients, this model delivers a clear advantage. It modernizes payment corridors while retaining full control.
Tokenized Deposits: Modernizing Payments Within Existing Bank Infrastructure
For many banks, tokenized deposits are the most natural extension of the existing system. Each token represents a commercial bank deposit and can be issued on a permissioned ledger or as a permissioned token. This design ensures that only approved customers can hold them, giving banks greater control and comfort. The underlying liability, regulatory treatment, and supervisory oversight usually remain unchanged; only the settlement mechanism evolves.
Yet challenges remain. Most current pilots operate as closed networks, limiting interoperability and cross-bank participation. Achieving scale will require shared technical and legal standards, and closer coordination between the different settlement systems that handle these digital assets. Tokenized deposit systems must connect seamlessly to other forms of digital money, including stablecoins and central bank projects to deliver the full benefits of continuous liquidity.
Project Acacia, a collaboration between the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre, shows how this interoperability works in practice. Using infrastructure built by Fireblocks, the initiative demonstrates how tokenized deposits, stablecoins, and wholesale CBDC can operate together for real-time, atomic settlement. The result is continuous liquidity across multiple networks with reduced counterparty and settlement risk.
Of the three models, tokenized deposits align most closely with existing prudential frameworks. They are likely to anchor wholesale adoption, providing a trusted foundation. Many sophisticated banks, however, are simultaneously exploring stablecoins, because they grow impact beyond the banks’ existing customer base.
Why Interoperability Is Central to the Future of Transaction Banking
If the 20th century’s transaction banking model was defined by correspondent networks, the next will hinge on interoperable token networks.
Each of the three models outlined here plays a role in that evolution, and across these models, a single direction is emerging: liquidity that moves continuously, within prudential limits and existing settlement-finality regimes. It is a vision of capital freed from geography and settlement freed from the clock.
Interoperability will determine how far that vision reaches. To achieve it, banks need infrastructure that connects private and public ledgers, wholesale and retail flows, without rebuilding the systems that already work. The priority is not to choose a single network, but design for flexibility, connectivity and financial opportunity.
Banks should build their stablecoin and digital asset infrastructure on secure, governed platforms that integrate custody, policy control, and token management. From there, they can link directly to a network of regulated counterparties, with whom they can partner to transfer value for their combined universe of onboarded clients.
The Fireblocks Network for Payments provides this foundation, enabling banks to move digital value securely and extend connectivity to any blockchain or settlement network their clients require, whether it’s Swift’s new blockchain initiative, the Circle Payments Network, or RTGS fiat rails. Banks can connect without duplicating infrastructure, with minimal integration effort, and preserving their operational, compliance, and governance frameworks.
The next chapter of transaction and commercial banking will be defined by interoperability—token networks that connect across currencies, institutions, and technologies to create a more fluid system of liquidity. It is capital freed from geography and settlement freed from the clock, achieved through interoperability on the bank’s own terms: one infrastructure, many networks, continuous liquidity.
FAQs: Use Cases for Stablecoins and Tokenized Deposits in Transaction Banking
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How do stablecoins or tokenised deposits improve payments and collections for corporates?
By embedding stablecoins or tokenised deposits into collection workflows, banks can enable merchants and corporates to receive funds instantly—even across jurisdictions and outside business hours—supporting real-time cross-border payments.
Treasury teams gain real-time visibility over incoming liquidity and can automatically trigger internal sweeps or FX conversions when balances reach predefined thresholds, enabling automated treasury management. This is especially valuable for corporates operating in regions outside U.S. dollar clearing time zones. The result is continuous, predictable liquidity rather than end-of-day batches.
Looking ahead, smart contract logic can tag incoming payments with invoice metadata, enabling invoice automation and streamlining reconciliation. These capabilities reduce days sales outstanding (DSO), improve cash flow, and lower cost per transaction.
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How are stablecoins and tokenized deposits improving cash management and short-term treasury operations?
Tokenised money-market funds (MMFs) and automated sweeps are emerging as the next frontier of liquidity optimisation. Banks can support their clients by enabling automated intraday sweeps into (or out of) yield-bearing instruments.
This allows a treasurer’s ‘buffer’ of 2.5–4% to be confidently lowered without risking missed payments or margin calls. With digital money infrastructure, treasury teams can maintain real-time access to liquidity while earning yield on otherwise idle balances—improving capital efficiency without compromising operational readiness.
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How do stablecoins and tokenized deposits transform trade finance, invoice financing, and lending?
Digital money enables new forms of working capital finance. With tokenized invoices and programmable payments, banks can trigger automatic financing upon invoice issuance and repayment upon settlement.
This reduces credit risk and improves capital velocity for the bank, while allowing their clients to access working capital on demand—without lengthy underwriting. These flows effectively mirror traditional trade finance structures, such as letters of credit and invoice discounting, but are executed through automated, real-time settlement.
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How are banks using embedded finance to integrate stablecoins and tokenized deposits into client ERP systems?
Digital money functionality can be integrated directly into client ERP systems. Through embedded finance integrations, commercial banks can allow clients to initiate a tokenized sweep or FX conversion, update ledgers automatically, and push confirmations back into the ERP.
This is where the programmable nature of digital money meets embedded finance: banking functions operate seamlessly within the corporate’s own systems.
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What are the benefits of stablecoins and tokenized deposits for treasurers and corporates?
For corporate treasurers, stablecoins and tokenized deposits unlock real-time access to liquidity, enabling better use of collateral to optimize cashflows, reduce borrowing costs, and earn yield. For banks, they create new revenue opportunities across payments, collections, lending, and liquidity management.
Delivering these outcomes requires infrastructure that can securely support settlement, automation, and integration across systems—without adding operational risk.
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