Is a Layered, Tokenised System the Medium Future for Payments?

Stablecoin is not the end point. The technology and adoption are moving at pace, while governments and regional authorities look to regulate it, without stifling innovation. This significant change for the payments sector could see stablecoins becoming another settlement rail for foreign exchange services by as early as 2028. But the acceptance and wider use of stablecoin may be only the beginning of the changes in the sector.

There is likely to be a layered system, at least in the medium term. The next few years could see different models being tested and running alongside each other. A recent McKinsey paper describes this effort as looking to ‘solve the long-standing frictions of global money movement’. It describes how stablecoins, tokenised bank deposits and tokenised central bank digital currencies could exist as an on-chain layered system. The IMF also sees stablecoin as part of a wider move towards tokenisation. It highlights benefits such as ‘atomic settlement, continuous liquidity management, and programmable financial assets’ to come from this ‘structural shift in financial architecture’. So it seems the future for payments is likely to include increased adoption of tokenisation is by banks, asset managers, and financial market infrastructures.

The benefits of tokenisation will drive its acceptance. We expect to see corporate treasury and cross-border payment workflows to accept tokenised and programmable settlement. JP Morgan’s research supports the idea and identifies blockchain-enabled payments, real-time liquidity, programmable automation, and connected treasury systems as major forces set to shape payment infrastructure in 2026 and beyond. It says that ‘60% of institutions [are] looking to increase their exposure to digital assets’, while ‘nearly 60% of Fortune 500 companies say they are planning to implement blockchain initiatives, with many of those focussed on payments and settlements’.

That said, businesses are likely to adapt incrementally. The longer-term future may include all these elements, but for that to happen the industry needs to address structural challenges like liquidity, operational costs and balance-sheet impact. This will happen over time. To date, ‘stablecoins have yet to transition from retail to institutional applications, tokenized deposits have yet to achieve true fungibility and interoperability, and central bank digital currencies are still in their early stages’ (McKinsey).

It looks like a combination will be important. We think it’s unlikely that stablecoin will entirely replace other payment processes. The near future will be a place where regulated banks, payment networks, and digital asset infrastructure coexist. Success will come from the ability to use tokenized deposits, stablecoins, and payment tokens to improve speed, programmability, and cross-border settlement.

At Freemarket, we are able to support tokenised assets in our payments network. So you have the choice of moving money through multiple rails, including traditional banking and stablecoin-based settlement.

Come and talk to us about it.