The future of stablecoin: Why banks and fintech firms must work together

Business Times

8 hours ago

[SINGAPORE] As digital currencies continue reshaping the global financial landscape, stablecoin – a type of cryptocurrency pegged to fiat currencies – are coming to the fore, notably for their ability to simplify processes and accelerate cross-border transactions around the clock.
The global stablecoin market is expanding rapidly, and becoming increasingly competitive. T; the average monthly supply of stablecoin in circulation climbed roughly 50 per cent year on year to US$228.18 billion in July 2025, said the New York-headquartered data analytics firm, Allium.
In 2024, the total transaction volume of stablecoin had already surpassed US$27 trillion, beating the combined volumes processed by legacy players Mastercard and Visa.
Luke Boland, Standard Chartered Bank's head of fintech for Asean, South Asia and Greater China and North Asia, observed growing client interest in partnering on stablecoin use cases and asset tokenisation.
However, he emphasised that banks and fintech companies must work together to address key issues in the industry; the challenges range from technology and market and payment infrastructure to legal and compliance requirements.
Boland noted, 'We are leveraging both our existing banking solutions and partnering with companies that complement our proposition through emerging innovations.'
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Under such partnerships, he pointed out that banks offer their trusted reputation for safety and adherence to stringent regulatory and capital requirements, ensuring the certainty of money, while fintechs excel at driving adoption by creating efficiencies and cost savings, especially when servicing both buyers and sellers on one platform.
Standard Chartered, for example, has been engaging with Circle, the issuer of USDC, the second-largest stablecoin by market value, as an advisory bank to Circle Payments Network (CPN) . The bank has been contributing to the shaping of the network's design, compliance framework and operational standards.
Designed with a compliance-first payments-coordination protocol, the network aims to enable financial institutions to securely exchange payment instructions and settle transactions in regulated stablecoin, at lower cost and with fewer delays than the traditional correspondent banking system.
Initial use cases include supplier payments, remittances, global payroll, capital markets settlement or treasury operations.
Standard Chartered called Circle's compliance-first approach to build CPN 'a game changer for cross-border money movement', which aligns with the bank's strategy to make payments more efficient, secure and globally compliant.
Overcoming institutional barriers
A survey conducted earlier this year by Coinbase and EY-Parthenon found that 83 per cent of institutional investors plan to increase their crypto exposure in 2025, and that 84 per cent were either already using, or showing interest in stablecoin.
However, they remain concerned primarily about regulatory uncertainty, price volatility and the security of asset custody.
In response to growing demand, StanChart recently launched a fully integrated digital-asset trading service through its UK branch, becoming the first Global Systemically Important Bank (G-SIB) to offer deliverable spot crypto asset trading in Bitcoin and Ethereum for institutional clients, including corporates, investors and asset managers.
Boland said: 'Operating within Standard Chartered's regulated banking framework, this offering is uniquely positioned to remove many of the barriers (that) institutional clients face when entering the crypto space.'
This service adds to the bank's growing suite of digital asset capabilities, which includes custody and trading through its Corporate and Investment Bank, as well as through its ventures, Zodia Custody and Zodia Markets, along with tokenisation services offered by another venture, Libeara.
In Singapore, StanChart has a strategic partnership with StraitsX to provide robust cash management and custody services for the reserve assets backing StraitsX's US Dollar and Singapore Dollar stablecoin, XUSD and XSGD.
Toward regulatory clarity
Governments worldwide are exploring the use of central bank-backed digital currencies and other forms of stablecoin as they recalibrate monetary policies and modernise their financial systems.
Boland believes that this evolution paves the way for broader participation in an on-chain financial world, emphasising that clear regulations and new compliance paradigms are essential for fostering stronger collaboration among banks, fintechs and technology partners who are navigating the shifting financial landscape.
One such example is the 'Travel Rule', a global anti-money laundering framework originally issued by the Financial Action Task Force, the global body that takes action to tackle money laundering, terrorist and proliferation financing.
The rule requires both bank-issued stablecoin and non-bank issuers to collect and share identifying information about the senders and recipients of crypto transactions that exceed certain thresholds.
'This rule helps in making digital currencies safer by tracking the movement of virtual assets,' Boland added.
Further regulatory strides, including Singapore's Single Currency Stablecoin Framework, Hong Kong's Stablecoin Bill , and the US Genius Act , are helping to move the crypto asset into the financial mainstream, enabling adoption and innovation at a faster pace.
Non-US dollar stablecoin
Although US dollar-pegged stablecoin still dominates the global market, accounting for around 98 per cent of the market capitalisation, the rise of non-dollar alternatives is gaining momentum, driven by regulators' concerns over monetary sovereignty, the need for local payment innovation, capital flow control, and the push to enable regional trade integration.
Zodia Markets, a digital asset exchange and brokerage platform backed by Standard Chartered, currently lists nine non-dollar stablecoins. Four more are in the pipeline.
In partnership with Animoca Brands and HKT, Standard Chartered has also set up a joint venture aiming to issue a Hong Kong dollar-backed stablecoin , strategically positioned to be among one of the first issuers to pioneer in this market in the region.
Boland described the venture as 'a good starting point' to gain valuable insights and to 'build a blueprint that could potentially be applied to offering stablecoin in other markets'.
'The best way to learn and engage in this space is to actively participate, rather than to remain passive... We see space for both (USD and non-USD stablecoin) to exist, and to support our global clients as they transact internationally in our footprint.'