“When you think about what you’re using as cash for payments and settlement, you look at what’s the claim, what’s the backing, what’s the form, what’s the access,” Sharma said.
His comments addressed how privately issued stablecoins, commercial-bank deposits and central-bank money could operate within one financial system. A user paying with a dollar stablecoin, for example, would need the recipient’s bank to recognize the asset and convert it into a deposit liability without creating uncertainty over its value.
“In tangible terms: I could pay through a stablecoin, and the banking infrastructure needs to accept that, transform it into a deposit liability, and provide that recourse.”
Banks would also require a settlement system for payments moving between institutions. Sharma placed central banks at that final layer, where obligations between regulated financial institutions can be settled in central-bank money.
Different forms of cash create different risks
Sharma said investors can benefit from having several forms of digital cash, but each form carries its own economic exposure and redemption structure.
“From an investor-optionality standpoint, having different forms of cash is a good thing. But from a recourse, economic exposure, and risk standpoint, singleness of money is an imperative.”
A commercial-bank deposit represents a liability of the bank, while a stablecoin represents a claim structured by its issuer and governing terms. Central-bank money carries a direct claim on the monetary authority.
Stablecoin users therefore depend on the issuer’s reserves, custody arrangements, and ability to process redemptions. Even when a token tracks one dollar in normal trading, liquidity pressure or concern over its backing can cause it to trade below its stated value.
Interoperability alone would not remove those differences. According to Sharma, banking acceptance, conversion into deposits, and access to a final settlement mechanism must work together if stablecoins are to serve regulated financial markets.
Speaking from a central-bank perspective, Philipp Müller of the Swiss National Bank said commercial banks could issue stablecoins if they chose to do so. His institution, however, must provide banks with a safe payment method suited to their requirements.
“That could be wholesale CBDC, it could still be fiat money. Only time will tell,” Müller said.
His remarks separated retail products from central-bank infrastructure. Commercial banks may offer cash instruments to customers, while the central bank concentrates on settlement between regulated institutions and financial stability.
Dollar stablecoins have created a U.S. policy question
For U.S. users, BlackRock’s argument concerns both the safety of stablecoins and their place in the dollar system. Most large stablecoins reference the U.S. dollar and keep substantial reserves in cash, Treasury bills, or similar liquid assets.
The United States enacted the GENIUS Act in July 2025, creating a federal framework for payment stablecoins. Under the law, only permitted issuers may issue payment stablecoins in the country, subject to reserve, disclosure, and regulatory requirements.
Dollar-linked tokens can extend access to the currency outside conventional banking hours and across national borders. Their growth can also increase demand for the reserve assets issuers use to support redemptions.
As crypto.news previously reported, European Central Bank Executive Board member Isabel Schnabel said dollar-backed stablecoins could strengthen the dollar’s international position as the sector approached a market value of $300 billion. Euro-denominated stablecoins accounted for only a small share of the market, according to her remarks.
The same development has raised concerns in Europe about dependence on dollar payment products. Schnabel supported the digital euro as a public payment option, with a pilot expected in 2027 and potential readiness for issuance targeted for 2029.
Stablecoin reserves also connect token holders with the U.S. government-debt market. When issuers use short-term Treasuries to back circulating tokens, growth in stablecoin supply can translate into additional demand for those securities.
For holders, reserve quality does not make a stablecoin identical to an insured bank deposit. Redemption terms, legal priority, eligible customers and access to deposit protection can differ by product and jurisdiction.
Tokenized markets still depend on settlement cash
Sharma said the infrastructure needed for stablecoins and tokenized deposits begins with bank acceptance before moving to interoperability between institutions and final settlement.
“How will that happen? It’s about the layers of infrastructure coming together, starting with the banking infrastructure, in terms of acceptance and interoperability between tokenised deposits and stablecoins,” he said.
The final stage would involve a settlement layer capable of completing obligations without disrupting existing banking systems. Sharma said the mechanism could be provided in a “potentially unintrusive way,” although he did not specify one technical model.
Tokenized securities make the cash question more urgent because trading an asset on a blockchain does not guarantee that the payment side can settle on the same schedule. Markets may offer continuous transfers while banks, payment systems and foreign-exchange services continue to observe limited operating hours.
A recent examination of the weekend dollar funding gap found that always-open tokenized markets can face liquidity pressure when conventional dollar rails are unavailable. Settlement may remain incomplete even after the asset side of a transaction moves onchain.
During another Day 1 panel, ARK Invest’s Lorenzo Valente put the digital-asset market at about $3 trillion, with stablecoins accounting for roughly $300 billion and tokenized assets between $30 billion and $40 billion.
Valente said crypto had primarily been a retail market during its first decade because institutions lacked scalable tools, privacy, and sufficient compliance controls. He argued that the market had become large enough to draw more institutional capital as those gaps began to narrow.
BlackRock’s Sharma focused instead on how institutions could use different forms of regulated cash without losing a common settlement value. Banks would accept stablecoins, convert them into deposits, and settle their obligations through a layer supported by central-bank infrastructure under the model he described.
