Payward, Kraken’s parent company, has agreed to acquire Saldo Bank, a digital bank licensed in Lithuania, in a deal that would give the crypto exchange the European banking license it was reportedly seeking. The deal remains subject to regulatory approval and is expected to close in 2027. The agreement follows Kraken Financial’s becoming the first digital asset bank to receive a Federal Reserve master account in March. Meanwhile, seven U.K. banks have completed their first live tokenized deposit payments, and 25 U.S. banks are building a shared network to do the same.
As crypto firms and banks move closer together, it is reasonable to ask what lasting advantage stablecoins offer.
For a corporate treasurer, the answer comes down to fairly ordinary concerns: whether money arrives reliably, what it costs and what protection it carries. If an existing banking relationship can provide all three, there is little reason to transfer funds to a separate stablecoin issuer.
Stablecoins have a genuine head start. But if banks make tokenized deposits widely available and interoperable, banks catching up may prove to be stablecoins’ biggest competitive threat. Four issues will determine whether that happens: whether bank money can match stablecoin capabilities, whether banks can work together, who keeps the interest, and the more difficult questions of access and identity.
Stablecoins don’t have a monopoly on the technology
Consider the technology first. A tokenized deposit is a bank deposit recorded on a blockchain. It remains a claim on the bank, but can support the same kind of programmable payments as a stablecoin, automatically executing when agreed conditions are met.
A reserve-backed stablecoin operates differently. Its holder depends on the issuer’s reserves and redemption arrangements, while an eligible bank deposit can earn interest and qualify for deposit insurance within applicable limits.
A paper by Capgemini and Quant says banks can provide transfers around the clock without rebuilding their core systems.
Bank money also need not be confined to a closed network. JPM Coin, JPMorgan’s deposit token, has launched on Base and is expanding to Ethereum, although the bank still determines who can hold it. For businesses that have passed identity checks, that may not be a barrier. In terms of capability alone, stablecoins have no lasting advantage.
Note: The views expressed in this column are the author’s and do not necessarily reflect the views of CoinDesk, Inc. or its owners and affiliates.
Source: www.coindesk.com. Adapted by NBTC.
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