Will stablecoins replace traditional payment rails? The case for complementary systems.

At the Financial Times Live Digital Assets Summit last week, a panel of payment and banking experts gathered to tackle a question that's been asked countless times in fintech circles: will stablecoins replace existing payment systems?

Speaking alongside Ryan Hayward from Barclays, Imke Jacob from DZ Bank, and Salim Dhanani from Pave Bank, Keith Vander Leest, General Manager US at BVNK, helped sketch out the picture. Moderating was Laith Al-Khalaf from the Financial Times.

The conclusion? Stablecoins aren't here to demolish the old system. They're here to fill gaps.

The problem we’re trying to solve

The case for stablecoins starts with one observation: the global economy operates 24/7, but its payment infrastructure does not.

Within markets like the US or UK, domestic payment rails work well. Real-time systems like FedNow and Faster Payments have made same-day transfers routine. The infrastructure functions during banking hours. 

Cross-border, it breaks down.

"You have the working hour problem. You have the liquidity problem. You have the pre-funding problem," said Salim Dhanani from Pave Bank. "You have the correspondent counterparty risk problem. And so it all falls apart."

In countries lacking real-time rails or with patchy bank access, the friction multiplies: high costs, long settlement times, limited access to currencies like the dollar.

Stablecoins operate continuously, across borders. They solve problems the existing system leaves behind.

Three different worlds, three different use cases

But stablecoins aren't one solution. The benefit depends on who uses them.

For retail customers sending remittances across borders, stablecoins offer speed and cost savings. Keith Vander Leest described a BVNK client facilitating tuition payments from international students in Africa to British universities.

For multinational corporations, the 24/7 functionality unlocks working capital optimization. Money moves constantly rather than sitting idle. Salim Dhanani highlighted B2B trade settlements in shipping and energy, where stablecoins have become genuinely useful.

For institutional clients, Imke Jacob from DZ Bank explained, the use case shifts entirely. It's not about cross-border payments but financial markets applications – settlement in fixed income trading, collateral management, market infrastructure.

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Footage © Financial Times Live

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A programmable future

Beyond speed and reach sits something more significant: programmable money.

Stablecoins enable automated payment flows via smart contracts, real-time treasury operations, settlement following pre-written rules rather than human intervention. This layer remains largely unexplored. Panelists agreed the industry has barely scratched the surface of what's possible when payments execute automatically, triggered by events.

The complement, not the replacement

One theme recurred: stablecoins won't kill Swift, ACH, card networks, or existing rails.

"It's not about replacing any payment rail," said BVNK’s Keith Vander Leest. "It's about how stablecoins fit into what is already existing."

Banks operate on fractional reserves. They need deposit bases to generate credit. Central banks need policy instruments. These won't change. Instead, multiple rails will operate in parallel, each optimized for different purposes.

Tokenized deposits backed by central bank money will coexist with stablecoins. Domestic systems will run alongside crypto-native settlement layers. Its interoperability, not replacement.

The barriers ahead

Yet widespread adoption faces real obstacles.

Banks worry about regulatory treatment. What capital requirements apply? How do they appear on balance sheets? Can banks hold stablecoin reserves like fiat? These remain unsettled across jurisdictions.

Corporate treasurers need clarity. Can they treat stablecoins as cash? Will regulators accept them as collateral? Resolving these questions will unlock more mainstream enterprise adoption.

Distribution matters too. Stablecoins need integration into existing infrastructure. A stablecoin in an unregulated wallet has limited application. Flowing through banking infrastructure, connected to traditional rails, it becomes useful.

There's also sovereignty. Could widespread stablecoin adoption subtly replace domestic currency with the dollar? It's a legitimate concern driving caution in emerging markets worried about currency substitution.

The path forward

The path ahead requires negotiation around regulatory standards, capital treatment, and integration. It requires traditional finance and crypto-native companies accepting they need each other – banks provide distribution and regulatory clarity; stablecoins provide speed and interoperability.

We're seeing this happen. Mastercard's proposed acquisition of BVNK shows how existing payment networks are positioning themselves. Together with BVNK, Mastercard can leverage stablecoins across its existing infrastructure to unlock new value. For example, enabling retail customers to spend stablecoins anywhere Mastercard is accepted or businesses to reduce pre-funding requirements for card programs or Mastercard Move programs.

This points to a broader vision taking shape across the industry: the best rail for each use case. Stablecoins handling 24/7 settlement, tokenized deposits anchored in central bank money, traditional rails optimized for specific purposes, all connected through agreed standards.

Will stablecoins replace existing payment rails? No. Will they complement them? Almost certainly.

Watch the full conversation on demand with Ryan Hayward (Barclays), Imke Jacob (DZ Bank), Salim Dhanani (Pave Bank), and Laith Al-Khalaf (Financial Times) at the FT Live Digital Assets Summit