Stablecoins are moving fast, banks aren’t. As industry, business and consumer understanding deepens, token-based rails are starting to challenge mainstream infrastructure. The pressure to react and integrate is real.
Put simply: token-based money moves on new rails built outside the current banking infrastructure. They transfer value quickly and speak wallet and token, not traditional account, which is why integration bites in awkward places. Most banks still can’t connect
these new rails to their existing infrastructure. That gap runs through architecture, operations and policy.
Today’s stacks weren’t built for wallets, keys or on-chain events. The plumbing isn’t ready. And plumbing is about reliability, control and speed.
Meanwhile, blockchain-based payments and finance rails are scaling. In July 2025, stablecoin market cap hit $261 billion, its 22nd straight month of growth. Monthly trading
volumes reached $1.68 trillion, with Tether alone moving 71.3% of that. More than half (54%) of financial institutions expect to adopt stablecoins
within the next 12 months, driven by cost savings, faster settlement and, crucially, client demand.
Regulators are responding. The UK’s FCA is preparing new rules on asset backing and redemption rights. MiCAR is live in the EU and the GENIUS Act is live in the US, with stablecoins now formally classified as e-money tokens or asset-referenced tokens. Banks
are under pressure to decide how – and where – they engage.
What banks need to decide
The first decision is structural: extend the existing stack with specialist providers that support digital assets or shift to a model that supports token-based money and fast deployment. One adds surface coverage. The other rewires the foundation.
Most banks are still stuck at the starting line. Only 15% of financial institutions currently offer stablecoin services, according to EY.
Just 5% plan to build the full stack in-house. The rest are relying on third-party providers or hybrid models. Most legacy systems simply aren’t ready to integrate and operate end-to-end.
Eight out of 10 payment players say they face substantial effort to support emerging methods like stablecoins and tokenized deposits. The work ranges from middleware upgrades to full-stack rebuilds, according to Accenture’s
2025 Future of Money report
That’s just the plumbing. The second decision is operational. Stablecoins introduce issuer exposure. With e-money, banks dealt with commercial or central banks. With stablecoins, they’re tied to private issuers, like Circle and Tether, and to the blockchains
those assets run on – often Ethereum or Solana. That’s a new kind of dependency, and it needs a policy. Banks need to consider how changes to capital requirements play out with potentially stricter capital requirements for externally-issued stablecoins, and
take into account reputational and consumer protection risks.
Compliance processes also need to be bolstered to keep pace with token-based money. Know Your Transaction (KYT) systems must now monitor vast volumes of on-chain transfers, micro-payments, token splits and cross-chain flows – a task that traditional approaches
to KYC just can’t handle.
Adding comprehensive support for token-based money means provisioning a parallel account for digital assets. Even if that account only supports a single stablecoin, it still requires wallet logic, token reconciliation and other new systems. Simply bolting
on siloed stablecoin wallets won’t work; banks need to add extensive infrastructure to support a sustainable and reliable stablecoin offering.
The ECB flagged this in July: stablecoins are becoming entangled with traditional institutions, but integration remains limited. A handful of European banks
have joined a consortium to launch a stablecoin; others are attempting their own launches into the market. Most are still evaluating risk frameworks and infrastructure readiness.
The third decision is strategic. Tokenized deposits offer a way to stay in control. Unlike stablecoins, they’re issued by the bank and backed by funds held on the balance sheet. That allows direct management of liquidity, compliance, and settlement. But
deploying tokenized deposits still requires infrastructure that can handle token logic and on and off-chain reconciliation.
From control to consequence
The Bank for International Settlements, the global forum for central banks, has raised concerns about the growing interdependencies between stablecoins and traditional finance. These connections introduce
policy challenges around settlement, custody, and financial integrity. Concerns are also abundant that the singleness of money will become tested with stablecoin adoption; fluctuations in the assets backing stablecoins managed by external issuers may cause
differing values for money between customers’ accounts.
However, the benefits are worth the effort of making blockchain-based money compliant. As Jonathan Ovadia, CEO of crypto exchange OVEX said to me this week: “stablecoins represent a fundamental leap in financial infrastructure, the shift from snail mail
to email. They’re not just faster; they’re an order-of-magnitude improvement in efficiency, cost, and accessibility.”
Some markets are also exploring tokenized deposits as a safer alternative. Singapore and the UAE are already piloting tokenized deposit frameworks. These models preserve the bank’s role in money creation while enabling programmable settlement and atomic
delivery. But they only work if the bank’s infrastructure supports token issuance, wallet provisioning, and real-time compliance triggers.
Banks in the best position to move quickly with token-based money adoption, whether that is tokenized deposits, stablecoins or both, are those with modern, flexible account origination infrastructure. It lets them deploy new features and payment methods
fast. That means onboarding new asset types, launching programmable payments, and pushing updates without waiting for the next system overhaul.
Those building support for token-based money are at the front of the pack for adoption of tokenized assets when the time is right, leading the shift to programmable money; Pave Bank
raised almost $40 million for this exact promise. No hard-coded product logic. Just configuration layers built for digital asset workflows that seamlessly combine traditional and
modern financial services.
At its core, token-based money enables banks to strengthen their relationship with the consumer. It enables people and businesses to transact at the speed of intent, building programmatic payments and financial management into the banking stack. That’s how
you consistently deliver more value to your customers. Keep control of the stack. Build for what’s next.
