Sibos 2025: Are new products fulfilling their hyped-up promise? Part 2: Digital assets

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Sibos 2025: Are new products fulfilling their hyped-up promise? Part 2: Digital assets

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Sibos 2025 in Frankfurt featured dozens of sessions and presentations on the issues and opportunities surrounding digital currencies and their many offshoots.

We visited forums covering recent developments and future projections for CBDCs, tokenised assets/deposits, and stablecoins, although it was clear that the stablecoin topic was the 'sexier' of the three - probably because it has been in the international spotlight for the past few months after the US passed the GENIUS Act to establish the guardrails and rules of engagement for stablecoin issuers in the USA.

Survey says: strong stablecoin interest already among FI and corporate customers

One session, Navigating the digital asset landscape: Opportunities and challenges for banking leaders hosted by Mark Nichols and Jan Rosam, consultants to the financial industry for EY, highlighted the results of a recent company outreach on the topic. As the Frankfurt-resident Rosam explained: "We surveyed hundreds of financial services [firms] but also corporates on the use of stablecoins, which I think is really important because a lot of banks, at least, we are talking to looking at use cases."

The survey results told a remarkable story of rapid change in attitudes, even from just a few months ago, the EY duo explained. "60% of financial institutions and corporates believe they will get involved actively in stablecoins by end of 2026. This is a huge trend," Rosam noted, pointing out the survey also revealed that "75% of financial institutions plan to offer some kind of stablecoin services."

What has brought this demonstrable change in momentum for stablecoins (and other digital currency products) in the financial and corporate marketplace? Rosam said he and his US counterpart Nichols, and their consulting colleagues had lots of discussions with clients and FI board members on the topic. US actions also provided a catalyst for interest. “I think the GENIUS Act has done a nice job of promoting [stablecoin appetites]," though Nichols explained that the EY survey was completed before the GENIUS Act was passed and signed in July. 

"These statistics exploded even further globally," after the legislation was signed, he said. Further, he explained: "One of the things I wanted to highlight here is that 41% of organisations said that they've achieved at least 10% savings by using a stablecoin. Let’s think about it." Nichols then outlined the profit dynamics of emerging stablecoin-related revenue streams.

Stablecoin-linked savings and revenue both clear attractions for banks and their clients

"We've got transaction fees, we've got net interest income, and we've got FX. FX, clearly, is the money maker. That's still where the revenue is being protected [by FIs, traditionally a major profit centre for the industry] because it's the off ramp or in some cases, the on ramp [for stablecoin conversions], but that transaction fee and net interest income, [industry] participants in stablecoins are sharing more of the interest income. It might be called reward rather than yield, but they're participating in that and taking a greater share." Meanwhile, he said, transaction fees for stablecoins have been reduced to "pennies on the dollar in comparison to what we're seeing today from a [traditional cross-border payment] transaction fee and transaction cost perspective."

Issuers of stablecoins, Nichols concluded, are achieving significant savings. "But you can actually flip that stat" from the survey results, he said, pointing out that "9% of participants actually saved over 40% in their transaction fees and achieved a greater share of net interest income." That is why, he said, "it's so interesting to corporates today to get into stablecoins and into tokenised cash and other types of products. They want to participate, mainly because it's beneficial to them, but we're also seeing a number of yield-based products that enable real time, continuous yield," he explained, which "also enable you to be holding cash, but managing your cash flow, working capital up to the final minute. Today, you have to wait or give three to five days notice on the processing of funds. Again, not always, but in many cases, with stablecoins, I can do it at the final second."

Digital currency hubs forming now, banks urged not to miss opportunity to join in

As for proof of concept, Nichols asserted that EY has become a strong player among its consulting competitors in the stablecoin industry in the US. "We're not just talking about it,we're also doing it - with our friends from SAP just around the corner," noting that EY is the first live client on the digital currency hub provided by the Germany-headquartered global ERP provider.

Corporates, Nichols shared, in a cautionary aside to financial institution leaders in the session’s audience, are equally interested in stablecoins and looking into similar arrangements to issue and profit from their efficient use and investment. "If you look at what Circle is doing with the payment network, etc., they're directly addressing most corporates. So, I think it's therefore key for the banks to step into this ecosystem, otherwise they will lose a lot of money. Because, I mean, if the money (as shown in recent trends) is converted into stablecoins, they lost the balance sheet, or part of the balance," unless FIs take a strategic approach to stablecoins and their customers’ participation in the emerging arena for payments and investment. 

Even the plenary session that officially opened the annual Sibos conference featured cautious optimism from European regulatory, banking, and Swift leaders for traditional finance and digital currency products to continue to thrive together in harmonious existence - each finding their places in the emerging financial ecosystem from now into the future. Clearly, with all the new products, services and rails springing up regionally and globally across the ecommerce landscape – not to mention rising geopolitical and trade pressures that continue to bring upheaval to all corners - time will tell, though with so much change in the industry, it’s tough to pick any clear winners for slam-dunk cross-border payment and investment primacy at this early stage.

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Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.