Stablecoins and Banking: Integration or Irrelevance Ahead?

As stablecoins reshape global payment infrastructure, three leading voices explore the critical decisions facing financial institutions today.

Anthony Yeung, Chief Commercial Officer at CoinCover, Retno Widuri, Head of Crypto at Unlimit, and Jeremy McDougall, Strategic Solution Consulting Director at ACI Worldwide, examine whether traditional banks should compete with or integrate this emerging technology.

The discussion addresses the industry's pivotal shift from cost reduction to speed prioritisation, the implications of divergent US and EU regulatory frameworks and the geopolitical significance of stablecoins in maintaining dollar dominance.

As customers increasingly retain funds in digital assets rather than local currency, our panellists debate the new business models required for banks to remain relevant while balancing innovation opportunities against compliance and reputational risks.

Should traditional banks compete with or integrate stablecoin infrastructure before they become systemically important?

Anthony Yeung, CCO at CoinCover

Traditional banks are already likely to be fully integrated with existing payment rails and networks. Stablecoins provide an opportunity to add to those rails, whether for the bank’s own benefit or for their customers. The question is perhaps not whether to integrate, but rather what form that integration would take and how it would surface in the bank’s product suite.

Retno Widuri, Head of Crypto, at Unlimit

It’s clear that banks can no longer sit on the sidelines. Stablecoins are already becoming a backbone of global payment infrastructure. Standing still is the most dangerous strategy of all. 

The priority is for banks to innovate and find where they can add value - from turning stablecoins into yield-bearing treasury products to offering custody, compliance, and instant settlement services. 

Working with fintech partners will hold the key. This will enable banks to adapt and stay at the heart of this transformation rather than risk being left behind. 

Jeremy McDougall, Strategic Solution Consulting Director at ACI Worldwide 

Traditional banks should not view stablecoins as competition, but as infrastructure to be integrated. They are already moving from fringe potential to mainstream usage, and their programmability and low-cost settlement offer clear advantages. 

Stablecoins shouldn’t be seen as an ‘either-or’ proposition. The real question isn’t which payment type will “win”, but how they can co-exist to deliver reliability, stability and choice for consumers. 

Financial institutions must step away from a single-rail mindset and instead build strategies that treat the likes of stablecoins, tokenised bank deposits and real-time payments as complementary tools. Integrating stablecoin infrastructure now will help banks remain competitive and resilient as the payments landscape evolves.

Given that 90% of financial institutions prioritise speed over cost savings in stablecoins, what does this shift mean for how we approach cross-border payment strategies?

Retno Widuri, Head of Crypto, at Unlimit

For decades, cross-border payments were about cutting fees. Now speed has become the new currency in global transactions. Faster speeds mean greater working capital. This in turn enables businesses to maintain smoother daily operations and affords them the liquidity to remain flexible to new opportunities. 

But speed is only as good as the infrastructure behind it. For stablecoins to deliver on their promise, businesses need rails that offer instant conversion, robust custody, and built-in compliance. When these pieces come together, businesses can keep funds productive - even holding them in yield-bearing form right up to the moment of payment. 

Jeremy McDougall, Strategic Solution Consulting Director at ACI Worldwide 

Stablecoins are reshaping cross-border payment strategies by shifting the focus from cost-efficiency to speed, flexibility, and reliability. This change means financial institutions must move beyond traditional corridors and embrace real-time orchestration across multiple payment rails.

The reason is clear: the programmability functionality that stablecoins enable, allows for the pain points seen in traditional correspondent banking to be identified and addressed prior to settlement. In addition, stablecoins enable settlement in minutes and can reduce transaction costs by up to 80% compared to legacy systems. 

But more importantly, they bypass fragile local banking infrastructure, as seen in Africa where private firms are using stablecoins to pay foreign suppliers quickly and reliably.

As the US advances stablecoin legislation whilst MiCA creates the first licensed players in the EU, should multinationals focus on regulatory arbitrage or build universal compliance frameworks?

Anthony Yeung, CCO at CoinCover

Universal legislation would be ideal, but is unlikely, and stark differences are already emerging in how jurisdictions view and attempt to control stablecoins.

Traditionally, multinationals have operated under the rules of the most stringent regulator, on the basis that if that regulator is satisfied, jurisdictions with less stringent requirements would also be likely to be satisfied, a form of universal compliance framework.

Given the differences in how regulators are approaching stablecoins, however, this approach is not likely to work. Certain elements, such as KYC and AML provisions, are well established, well understood, and readily applied universally across jurisdictions.

Retno Widuri, Head of Crypto, at Unlimit

Regulatory arbitrage is short-term thinking. While the US has significantly advanced stablecoin legislation this year, and MiCA has created the first licensed players in Europe, businesses need to make sure that they think long-term. 

Multinationals can’t afford to navigate a patchwork of regulatory frameworks - they want clarity and certainty. Universal compliance is the foundation for scale, giving businesses confidence to expand across borders without constantly reworking their approach for each market. 

Trust is a global asset – it’s a language everyone understands. Regulatory arbitrage may win you a quarter, but only a universal compliance standard will win you a decade. 

Jeremy McDougall, Strategic Solution Consulting Director at ACI Worldwide 

Rather than pursuing regulatory arbitrage, multinationals should focus on building universal compliance frameworks that enable interoperability and future-proof their operations. If we look at AI, which quickly moved from unregulated uncertainty to mainstream adoption, stablecoins are likely to follow a similar trajectory as safeguards catch up.

Institutions that build flexible infrastructure and orchestration capabilities now will be better positioned to adapt to evolving regulations across jurisdictions. The goal should be to integrate new forms of digital money seamlessly, ensuring payments remain inclusive, accessible, and compliant globally.

With the US Treasury stating they'll use stablecoins to maintain dollar dominance, how does this geopolitical shift alter correspondent banking's future?

Retno Widuri, Head of Crypto, at Unlimit

Stablecoins have rewired the geopolitics of money – if issuers start buying more and more US debt while powering dollar dominance via USD denominated stablecoins on digital rails, the old correspondent banking model will eventually become hollowed out. Transactions won’t need long chains of intermediaries anymore if they are happening almost instantly peer to peer on blockchains.  

Clearly, banks will need to evolve. It’s not going to be enough for them to just be intermediaries anymore. Instead of controlling cross-border flows through their own networks, banks will need to become owners of stablecoin infrastructure and orchestrators and custodians of digital assets. The future of finance will be on-chain, programmable, and, most likely, dollar-backed.

If customers retain funds in stablecoins rather than settling in local currency, what new business models should banks develop to maintain relevance in a tokenised economy?

Anthony Yeung, CCO at CoinCover

If customers retain funds in stablecoins, banks are likely to want to keep those assets on their own platforms. That would mean being able to offer digital asset services, wallets and exchanges, seamlessly integrated with their fiat propositions. The exchange element, in particular, presents new revenue-generation opportunities.

Retno Widuri, Head of Crypto, at Unlimit

If customers aren’t depositing cash into banks anymore, then banks won’t be able to rely on the stickiness of customer deposits– at least not without offering business and consumers additional value for holding their digital assets. 

They must innovate, or they will get left behind. They should offer yield on tokenised treasuries or support yield-bearing stablecoins, deliver custody solutions for digital assets, and even further monetise transaction flows by embedding themselves more firmly into digital asset ecosystems.

Offering instant FX conversion at the point of payment will be another way that banks can stay relevant in a tokenised economy. The smartest move will be to work together with fintech partners to build digital asset trading products. Banks will need to become platforms for digital asset custody and flows – otherwise they will start to disappear.  

With stablecoins facilitating £30bn (US$40.3bn) in illicit transactions whilst embedding the dollar deeper into digital finance, how do we balance innovation opportunities against reputational risks of adoption?

Anthony Yeung, CCO at CoinCover

Between 0.14% and 0.2% of stablecoin transactions are flagged as potentially illicit. Stablecoins therefore still have some way to go to reach the levels of cash, 30% of which some sources estimate to consist of illicit transactions, or the 2.7% of global GDP estimated to be involved in money laundering.

Nonetheless, regulatory-compliant stablecoin adoption comes with the same AML and KYC considerations as fiat currency and, indeed, cash – in order to mitigate regulatory and reputational risk.

Retno Widuri, Head of Crypto, at Unlimit

Yes, stablecoins have facilitated illicit flows - but so have cash and wire transfers. £30bn (US$40.3bn) is not insignificant, but this represents a fraction of global illicit finance. The solution isn’t sitting out of the market, it’s building compliance-grade custody and real-time KYC into crypto rails. 

The opportunity that digital finance presents, for B2B payments in particular, is far too large to ignore. This is the moment for licensed, regulated players to lead in setting the standard for safe, scalable on- and off-ramp infrastructure. 

The balance lies in transparency and monitoring – as stablecoins move on public ledgers, financial institutions can use advanced on-chain analytics to trace flows, flag suspicious activity, and see risks in real-time. When implemented correctly, this can transform on-chain rails into a regulatory and reputational advantage. 

Ignore stablecoins, and you risk irrelevance as customers and corporates migrate to faster, tokenised rails. Adopt them blindly, and you open yourself to compliance failures and brand damage. The winners will be those who combine adoption with discipline. 

Jeremy McDougall, Strategic Solution Consulting Director at ACI Worldwide 

A cautious, balanced approach is essential. Stablecoins remain in a regulatory grey zone and pose systemic risks, including potential destabilisation of local currencies and economic liquidity. However, innovation should not be stifled by fear.

Reputational risk is not just about exposure to illicit activity; it’s about public trust. Financial institutions adopting stablecoin-related technologies must demonstrate proactive risk management, ethical alignment, and a commitment to financial integrity. Innovation without trust is unsustainable.