stable coins
By Steven Anderson
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Why Traditional Cross-Border Payments Bleed Money. International transfers usually pass through a chain of correspondent banks.
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Tokenized Deposits vs. Stablecoins: Not the Same Thing. People keep conflating these two, and they're not the same.
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What Actually Has to Work for This to Scale. The receiving end is the hard part. A token that moves fast from Singapore to New York only…
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DBS and Citi's New York office completed a dollar payment between Singapore and the US on September 5. Fast. Clean.
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The two banks haven't said how much money moved, and they haven't confirmed whether the service is open to all customers yet.
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International transfers usually pass through a chain of correspondent banks. Each one needs available funds. Each one operates on its own schedule.
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Tokenized deposits are designed to kill that problem. If the tokens can move on a Saturday night and settle in minutes, the prefunding calculus changes completely.
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Whether that promise holds up at scale is still unclear.
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People keep conflating these two, and they're not the same. Tokenized deposits keep the bank in the middle. The bank still owes the customer.
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Stablecoins work differently. They're backed by reserves — typically cash or short-term government securities — and they can move across wallets and platforms that have nothing…
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More context: Visas $2.5 Billion Credit Coop Initiative Tackles Card Settlement Timing Issues
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Citi is playing both sides. The bank is involved in tokenized deposit work and has a hand in stablecoin efforts too. That's probably smart.
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A group of 21 financial institutions announced plans for a dollar-denominated offering using tokenized deposits.
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It's worth noting that some of the infrastructure for fast settlement already exists. The European Central Bank's TIPS system handles round-the-clock euro settlements.
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The receiving end is the hard part. A token that moves fast from Singapore to New York only matters if the counterparty on the other side can actually accept or convert it.
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