The beginning of the end of the end of traditional forms of payment

• Stablecoins are not booming and CBDCs are not dead, especially in Europe where the ECB is pressing ahead with plans for a digital euro in 2028

• Different uses-cases will rely on different forms of tokenised money and the private sector is building the necessary infrastructure

• Corporates are drivers of change in payments and cash management and may be pioneering the disintermediation of the banks

Stablecoins are demonstrably useful. Since 2020, the market capitalisation of Stablecoins has grown at a compound annual rate (CAGR) of 106 per cent, and transaction volumes at a CAGR of 98 per cent. Circle, issuer of USDC - the second biggest and most regulated Stablecoin – recently completed an IPO. Stripe, Mastercard and Visa are building Stablecoin services.

So it was not surprising that a majority of delegates polled at the Future of Finance Digital Money event on 10 June 2026 expect Stablecoins to endure and a third see them as the likely future of commercial bank money (see Chart 1). Only tiny minorities reckoned Stablecoins are a temporary solution, and nobody viewed them as an investment bubble, a tool useful primarily to criminals, or a source of systemic risk.

Chart 1

Stablecoins usage is no longer confined to the cryptocurrency markets. Non-crypto businesses are using Stablecoins to make US$1 trillion of payments a month, especially across borders. Corporate treasurers are holding Stablecoins as working capital as well as using them to make payments. Stripe, Mastercard and Visa are building the infrastructure to enable Stablecoins to go mainstream.

Although Visa data shows 80-90 per cent of Stablecoin activity is still driven by cryptocurrency trading, Stablecoin volumes no longer fall in lockstep with cryptocurrency volume and value. There is an expectation that as payments are automated through the adoption of agentic AI, the use of Stablecoins by non-crypto businesses will, faute de mieux, increase further.

Central bank digital currencies (CBDCs) are far from dead. In China, both retail and corporate clients are already receiving e-CNY, the digital yuan or CBDC issued by the People's Bank of China (PBOC), into digital wallets, and will hold more once it becomes interest-bearing. In Europe, the European Central Bank (ECB) still intends to issue a digital euro in 2029, provided the necessary laws and regulations are adopted in 2026.

The earliest CBDCs to be issued have not enjoyed conspicuous success. The Eastern Caribbean has shut the initial version of its pioneering CBDC, launched in 2021; the other live CBDCs in the Bahamas (launched 2020), Jamaica (2022) and Nigeria (2021) have experienced minimal take-up. Like e-CNY and the proposed digital euro, they were all retail CBDCs, but launched into environments different from China and Europe.

The digital euro reflects the unique circumstances of the 21 member-states of the European Union (EU) that use the euro. Although the 21 countries are in a monetary union, the only means of payment common throughout is euro notes and coins. With cash usage declining, the reliance of Europeans on non-European card networks to make non-domestic payments infringes sovereignty. A digital version of cash is the solution.

Stablecoins also raise an issue of sovereignty for Europe. Though euro Stablecoins are proliferating (EURCV, EURC, EURAU, EUROe, Qivalis), 99 per cent of the value of the global Stablecoin market is denominated in US dollars. In May 2026, the President of the ECB gave a speech interpreted as sceptical about euro Stablecoins by comparison with a digital euro, especially in providing central bank money to settle wholesale transactions.

The likeliest outcome in Europe is a combination of tokenised monies which fulfil different use-cases. Wholesale transactions will settle between banks in CBDC. Non-banks will use Stablecoins to make cross-border payments. Tokenised deposits will be the principal form of tokenised commercial bank money. But European regulators are clear they prefer European banks to issue euro Stablecoins and tokenised deposits.

Whether regulators can influence outcomes as directly as that implies is questionable. Even the GENIUS Act, universally applauded in the cryptocurrency industry for promoting Stablecoins, has had little impact on the value or volume of US dollar Stablecoins since it passed. Stablecoins grew fastest before the Act was passed, because they met a need in the cryptocurrency markets. Use cases will continue to determine outcomes.

Use cases presently argue for the supremacy of the US dollar. According to the Bank for International Settlements (BIS) triennial survey of foreign exchange, the US dollar is on one side of 89 per cent of all FX trades. The euro is involved in 29 per cent of trades. So the real choice, at least in cross-border payments, is not between the US dollar and the euro but between US dollars in CBDC, Stablecoin or tokenised deposit format.

Use cases could over time argue for other currencies to be made available in tokenised form. Stablecoins are predominantly denominated in US dollars today because the cryptocurrency traders that need cash on-chain want to hold US dollars only. If tokenised assets are denominated in euro or sterling or other currencies, the demand to hold Stablecoins in euro, Sterling and other currencies will increase.

For now, however, a major reason non-US dollar Stablecoins struggle to grow is that US dollars are acceptable with a wider range of counterparties in a wider range of jurisdictions than, say, euros or sterling. US dollars also provide a more stable store of value. Stablecoins have grown because they make these benefits available to retail and wholesale customers in jurisdictions where direct access to US dollars is restricted.

CBDCs can be seen as innovation “theatre” that has lasted since Facebook unveiled Libra in 2019. On this view, domestic retail CBDCs are unnecessary since fast, cheap, 24/7 payment in a single currency is solved already. The shrinkage of correspondent banks indicates cross-border payments are close to a similar solution. So the case for retail CBDC reduces to the sovereignty and independence of national payments systems.

At least, this is the European view. The current administration in the United States, by halting work on a US dollar CBDC, has privatised digital money. It expects the private sector to innovate faster than the public, with opportunities arising in agentic payments and fractional reserve Stablecoins whose value is driven by yield. The administration also sees Stablecoin reserves as an additional means of funding the budget deficit.

The bet the US administration is placing on the private sector to innovate faster than the central bank can operate a CBDC looks as if it might pay off. In June 2026, The Clearing House, the private automated payments clearing house owned by 25 major US banks, announced that it will make tokenised deposit payments interoperable with traditional fiat currency payments rails such as RTP and CHIPs.

Europeans, on the other hand, reckon wholesale CBDCs still have value. Though requiring central banks to trust decentralised technology is a high hurdle – and Project Appia, though not Pontes, is not committed to blockchain technology - CBDCs meet demand from tokenised capital and cash markets for a risk-free settlement asset.  Stablecoins, which have issuer as well as reserve risk, cannot fulfil that role.   

If the appeal of the digital euro to the banks of Europe lies in its status as a risk-free settlement asset, for the central banks of Europe a digital euro keeps their control of monetary policy intact. Central banks also welcome commercial banks issuing tokenised deposits, because it retains in a legally if not technologically familiar format the two-tier monetary system of central and commercial bank money in a way Stablecoins cannot. 

Tokenised deposits suit corporate use cases better than Stablecoins too. The banks that have issued tokenised deposits to facilitate intra-bank payments between corporate clients could have chosen Stablecoins for the same purpose.  But the financial crime compliance costs of using Stablecoins makes the idea uneconomic. Using the deposits of the bank instead, where compliance is baked in already, circumvents that cost.

Corporates can issue their own tokenised money. Many are already issuing money-like instruments in the form of loyalty programmes. In such cases, money is combined with marketing. Tokenised equity and debt can be used in the same way to turn loyal customers into shareholders. Corporates will be tempted to bypass domestic and cross-border banking systems altogether in order to get paid promptly at lower cost.

One reason Ripple acquired treasury management systems vendor GTreasury in October 2025 was to exploit the opportunity it identified in speeding up and lowering the costs of corporate payments by making it easier for companies to pay using Stablecoins and tokenised deposits. The tie-up also aims to make it easier for companies to reinvest idle cash in the tokenised repo market.

One reason tokenised money market funds are being issued at scale is that corporates do not want to hold idle cash in Stablecoins where the issuer retains all the yield from the high-quality liquid assets (HQLAs) held in reserves. It is a further sign that corporates are willing to bypass banks that profit from slowing payments down, and exacting transaction fees, especially across borders through long chains of correspondent banks.

What keeps the banks in the payment loop for now is the question of trust. Both Stablecoins and tokenised money market funds are issued by non-banks. They have a proven tendency to dip below par in stressed markets. Infrastructural solutions, such as that being pursued by Project Agora, could solve that problem of trust by embedding tokenised monies within the existing system of centra and commercial banks.

The privatisation of the digital dollar creates a larger opportunity for the euro to increase its share of international reserves and cross-border payments. Though its lack of a single fiscal policy inhibits its ability to supplant the US dollar, moves such as the links between India’s Unified Payments Interface (UPI) and the ECB’s TARGET Instant Payment Settlement (TIPS) show how the euro can increase cross-border payments traffic.

Concerns that a digital euro will eliminate the anonymity of private payments, cap the size of holdings and enable restrictions on the use of money are exaggerated, in Europe if not China. Although holdings of the digital euro will be capped at €3-4,000, the enabling European legislation specifies that the authorities (as opposed to banks) will see only anonymised transactional data and that the digital euro cannot be programmed.

The risk of government surveillance of transactions is not restricted to CBDCs anyway. The authorities can suborn banks to gain access to private data. Programmability is also a familiar issue, in the sense that governments have long had an interest in tracing payments to combat crime. So surveillance and especially programmability - since it reduces fungibility - are best considered separately from forms of money.