Finzly unveils plan for the deployment of its stablecoin and deposit tokens through its API-driven, multi-route payment system
Financial institutions are exploring innovative ways to generate new revenue streams and enhance efficiency, and stablecoins are proving to be a promising solution. These digital assets, backed by traditional fiat currencies, offer several specific use cases and benefits, particularly related to revenue generation, cross-border payment efficiency, and treasury management.
Use Cases
Stablecoins enable much faster and cheaper cross-border transactions than traditional banking methods by reducing or eliminating intermediaries, shortening settlement times from days to minutes, and lowering fees significantly. They can be used for real-time liquidity movement and automated payments, improving treasury operations by offering transparency, faster settlements, and 24/7 availability. Banks can issue tokenized deposits backed 1:1 by reserves, which can serve as digital cash equivalents within blockchain ecosystems, improving internal liquidity management and operational efficiency. Stablecoins also speed up loan disbursements and repayments, especially cross-border, by offering near-instant settlements and reduced costs.
Benefits for Financial Institutions
The benefits of stablecoins for financial institutions are numerous. They can earn fees on stablecoin issuance and transactions, arbitrage investment returns on reserve holdings, and capture deposits that might otherwise go to non-bank stablecoin issuers. By lowering reliance on correspondent banks and payment intermediaries, institutions reduce transaction fees and infrastructure costs tied to payments and settlements. Blockchain auditability ensures full transparency into reserve backing and transaction provenance, mitigating reputational and operational risks. The GENIUS Act provides clear legal frameworks allowing banks to issue stablecoins as off-balance-sheet liabilities held by subsidiaries without capital charges, easing regulatory concerns and facilitating adoption. Early adopters can leverage stablecoins to innovate payment services, improve customer experience, and access new global markets more efficiently.
Cross-Border Payment Efficiency
Stablecoins settle transactions in minutes on blockchain networks operating 24/7, significantly reducing costs for institutions and their customers. Elimination of intermediaries like correspondent banks also facilitates financial inclusion by enabling seamless international transactions without the constraints of traditional banking hours or currency exchange delays.
Enhanced Treasury Management
Real-time liquidity management becomes possible as funds held in tokenized deposits or stablecoins can be moved instantly and securely inside and outside the institution. Stablecoins provide a hedge against currency volatility by enabling companies and banks to hold stable-value digital assets alongside traditional cash reserves. Transparency and programmability enable more tailored, automated treasury processes, reducing operational risks and improving efficiency.
In summary, financial institutions benefit from stablecoins and tokenized deposits through faster, cheaper, and more transparent payment and settlement processes, new revenue streams from token issuance and asset tokenization, and improved treasury efficiencies. Regulatory support like the GENIUS Act further incentivizes banks to integrate these technologies into their core operations. Major institutions such as JPMorgan and Citigroup are already exploring or implementing stablecoin initiatives, highlighting the strategic importance and near-term viability of this financial innovation.
Finzly, a payment infrastructure provider, is preparing to support stablecoin and tokenized deposits, offering a composable, ISO 20022-native platform with smart routing, real-time APIs, and a programmable rules engine suitable for digital assets like stablecoins. As stablecoins continue to gain traction, with circulation doubling to $250 billion over the past 18 months and forecasts to reach $400 billion by year-end and $2 trillion by 2028, financial institutions that prepare with the right infrastructure will be well-positioned to thrive in this evolving landscape.
- Financial institutions are exploring the integration of stablecoins into their operations, as these digital assets can generate new revenue streams, such as from stablecoin issuance and asset tokenization, while also lowering transaction fees through technology like blockchain.
- Cross-border payments become more efficient with stablecoins, as they offer faster, cheaper, and more transparent transactions, reducing dependence on intermediaries and enabling financial inclusion for institutions and their customers.
- Stablecoins offer enhanced treasury management through real-time liquidity movement, reduced currency volatility, and automated, tailored treasury processes, leading to improved operational efficiency and reduced operational risks for businesses worldwide.
