Building stablecoin infrastructure

Banking faces an inflection point as tokenized cash — primarily stablecoins and tokenized deposits — matures from a crypto utility to a core settlement layer. With more than $25 trillion in annual global transactions, traditional correspondent banking is being challenged. At Thoughtworks,  we see this as a critical mandate for digital reinvention.

Institutions must act now to define their role, as issuers, custodians or facilitators by modernizing their digital core with cloud, distributed ledger technology and AI. Failure to build this agile infrastructure risks being displaced from the lucrative cross-border, B2B and wholesale payments markets by digital-native competitors. The strategic imperative is to turn regulatory clarity (e.g., EU MiCA, US GENIUS Act) into a catalyst to move quickly and create competitive advantage by enabling instant, global, 24x7, programmable finance.

Stablecoins are changing the rules of money

Stablecoins represent the most significant evolution in banking since the abandonment of the gold standard, positioned to enable "the next financial architecture". They are tokenized cash issued by private institutions on public blockchain, pegged to fiat currency and backed by audited reserves. This is in contrast to the legacy issuance of cash and liquidity from a central bank.

This is a market moving rapidly toward maturity:

• Scale and velocity. Annual on-chain stablecoin transaction volumes have exceeded $25 trillion globally, approaching the scale of major global card networks. This volume reflects institutional readiness and market maturity.

   

• Global treasury impact. As stablecoin issuers become major holders of reserves, their operations are driving rising demand for short-term U.S. Treasury bonds. This trend is raising complex policy questions around monetary control and liquidity concentration and carries implications for U.S. fiscal stability and global market dynamics. In addition, a concentration of reserves in short-term Treasuries may amplify fragility during liquidity events (e.g., T-bill sell-offs).

   

• Institutionalization. The rise of stablecoins is coupled with the emergence of bank-issued deposit tokens (e.g. JPM Coin where the token is the master and on a public chain), which are representations of customer funds on a distributed ledger, enabling real-time settlement within or between institutions and tokenized deposits, as implemented by JPM some 2 years ago - where the account is still the master record. 

   

• Regulatory acceleration. Clear regulatory frameworks, such as the EU's MiCA and the US GENIUS Act, are delivering clarity and unlocking a safer innovation runway for institutions.

Stablecoins have moved the industry past the point of debating if this technology will matter, but rather when it will be adopted at scale. The conversation we’re having with institutions now is about readiness — operational, regulatory and strategic. What’s emerging is a clear recognition that tokenized money introduces a settlement model that is faster, more transparent and fundamentally more aligned with how global businesses operate today.

For banks, this isn’t simply a new payment method. It’s a restructuring of how liquidity moves through the system. The players that prepare their infrastructure early — the ones who can plug into multiple rails and serve clients reliably at scale — will be the ones defining the standards that everyone else follows.

— Stephen Richardson, Chief Strategy Officer and Head of Banking at digital asset infrastructure provider Fireblocks (which counts BNY and ANZ Bank amongst its customers).

Disrupting payments and investment banking 

Stablecoins pose a direct competitive threat to the high-margin, low-value segments of the payments industry, particularly in cross-border flows. The underlying Blockchain/DLT technology also provides considerable cost-saving opportunities in wholesale activities.

• A fundamental threat to deposits. The true scaling of stablecoins — where customers retain their funds in tokenized cash rather than immediately off-ramping to fiat — has far-reaching consequences for deposit funding and the revenue models of financial institutions. This threatens the traditional deposit base that fuels bank lending and profitability and the deposit destabilization is accelerating given the stablecoin yield facilitated by exchanges at very competitive rates (~4% vs <1% for bank current accounts). 

   

• Cost and speed. Stablecoins offer global, instant settlement, 24/7 availability and lower transaction costs, directly solving the perennial payments issue of slow speed and high fees inherent in the multi-intermediary legacy system.

   

• Cross-border and inclusion. Stablecoin adoption is driven by lower transaction costs, enhanced speed and reduced barriers to entry, particularly in remittance corridors and regions experiencing high inflation or currency depreciation. Crucially, over 80 per cent of stablecoin transactions occur outside the United States.  Illustrated by the digital money dashboard from Cambridge Centre of Alternative Finance, which tracks flows by country (as of 9/24).

   

• Eliminating post-trade costs. Blockchain technology has the potential to reduce infrastructure costs for the world's largest investment banks by an average of 30 per cent, translating to $8 billion to $12 billion in annual cost savings. This value is achieved primarily by reducing or eliminating reconciliation costs in middle- and back-office processes.

   

• The programmable economy. Stablecoins are essential for the future of agentic AI systems. Their programmable nature, enabled by smart contracts, allows complex B2B payments (e.g., supply chain finance, treasury rebalancing) to be executed autonomously and instantly.

   

• Transaction banking is now multi-rail. The market is shifting from the legacy correspondent system to a "multi-rail" landscape where stablecoins, instant payment linkages (such as Project Nexus) and provider platforms (like Stripe) coexist. Banks must prepare systems that can orchestrate across these rails in real time and there are several interoperability projects underway (including SWIFT’s blockchain integrations, BIS Project Agorá).

Banks face a critical choice: lead in the programmable money era or be left behind as the infrastructure shifts beneath them. The future will feature bank and commercial stablecoins, tokenized deposits and wholesale CBDCs operating side by side with universal interoperability, each playing a different role.

For banks, this isn't about defending the old system, it's about defining their position in a comprehensive digital money ecosystem that supports everything from micropayments to 24x7 large-value settlement. Those that invest now in the infrastructure to participate across all three models will shape the next generation of finance.

— Gilbert Verdian, ​​​​CEO and Founder, Quant

Money that’s instant, programmable and borderless

Banks must treat tokenized cash not as a product, but as a new financial infrastructure.  This infrastructure will require investment, stabilization, conveyance of trust to users and within the ecosystem. Institutions must strategically define their participation model.

• Issue or facilitate. Banks must decide if they will issue their own tokenized deposits (defending their low-cost deposit funding) or if they will act as facilitators and custodians, providing the regulated on/off-ramps between stablecoins and fiat for corporate and institutional clients.

   

• The economics are thin. Under restrictive regimes, profitability relies solely on transaction fees and FX spreads, with margins around 0.24 per cent (near break-even), highlighting that scale is non-negotiable for success.

   

• Why this is urgent (risk management). The rapid growth of stablecoins creates risks, including systemic risks to the financial system, regulatory arbitrage concerns and potential currency substitution in emerging markets.  There is also significant operational resilience and cyber/contract risk to be considered. Creating scale and leverage by helping to build the infrastructure, while managing the risks, establishes banks as part of the opportunity

   

Banks that succeed will:

• Transform their core systems to enable instant, global transactions.
  
  

• Run regulatory pilots and consortium projects.
  
  

• Build compliant, user-friendly and interoperable systems.

If banks believe that we are entering into a world of tokens and chains, what is the measure they can take to cover themselves against the broader range of possible outcomes? Picking winners is hard. 

We don't know which chain will win, nor which token.  The common denominators are the places to invest in. One of them is wallet infrastructure - this is table stakes in the paradigm shift where tradfi merges with web3.  The other is interoperability, which is where Ubyx plays. We see tokenized money becoming ubiquitous, with banks and fintechs at the center of the revolution.

— Tony McLaughlin, CEO, Ubyx Inc.

Playbooks for readiness

Winning in the digital asset economy requires a complete organizational reinvention built around a modern digital core. Thoughtworks recommends size-specific playbooks:

In practice, this means treating the core not as a system of record but as a system of participation that's continuously modernized to plug into new networks as they emerge.  The core must be designed for agility and flexibility in order to keep pace with the new technology available today and in the future.

The path to scale requires specific foundational investments:

• Core modernization. Core banking systems must sync in near real-time with distributed ledgers and token registries, requiring a move from monolithic systems to scalable modular architecture that operates as a continuously modernized set of systems.

   

• Compliance-as-code. This must shift from a manual burden to a design principle. Thoughtworks defines compliance-as-code as a living control system that embeds KYC/AML checks, sanctions screening and regulatory reporting directly into transaction flows and APIs. For example, a sanctions check can trigger automatically before a smart-contract transfer executes, with the result and audit trail recorded instantly in the bank’s compliance ledger.

   

• Interoperability. Engineer the stack to seamlessly connect stablecoins, tokenized deposits, bank tokens and CBDCs, treating interoperability as non-negotiable. The bank of the future will be composable with the ability to scale and facilitate new payment types considerably faster than today.

   

• Tackling the talent and skills gap. The reliance on AI, DLT and complex interoperability requires significant investment in upskilling and acquiring specialist talent (e.g., crypto custody operators, compliance engineers) to design, manage and audit these new systems.

As corporates increasingly realise the financial savings from increased liquidity, yield on stationary cash and 24x7 operations that stablecoins offer, banks need to accelerate either defining their role in the stablecoin ecosystem or building the inter-bank settlement layer for tokenized deposits — or both.

— Keith Bear, Fellow, Cambridge Centre for Alternative Finance

The beginning of a new settlement era

For banks, this is a call to action for modernization and isn’t simply a technology race; it’s a redefinition of institutional relevance. The leaders of tomorrow will be those who transform their digital core to enable instant value exchange across markets, currencies and ecosystems.

Banks that start small through sandbox pilots with regulators or consortium participation will be best placed to lead the programmable finance era. Successful programs will be compliant, have intuitive customer interactions, work seamlessly with other money types and will process, settle and reconcile alongside current monetary frameworks. 

For thirty years, Thoughtworks has helped financial institutions turn systemic change into competitive advantage. The next frontier of programmable, interoperable money demands the same engineering-led reinvention. The time to build is now.