By: Joy Macknight

While artificial intelligence (AI), ranging from machine learning to agentic commerce, dominated discussions at the Money 20/20 conference in Amsterdam earlier this month, the rise of stablecoins was another hot topic. Various panels during the three-day payments conference tackled stablecoins from different perspectives, underscoring how the digital asset class, which by definition is pegged to a traditional asset, has evolved from a niche interest to an economic force.

“There are no major jurisdictions that don’t have a view on stablecoins and the role that they can potentially play in the future multi-moneyverse,” said Samantha Emery, Executive, Advisor and Board Member, Via Nova Strategic Advisory, in her opening remarks during a panel on the geopolitical implications of stablecoins.

For Simon Seiter, Chief Financial Officer and Chief Product Officer at e-money institute AllUnity, the fact that a privately-owned and largely unregulated company such as Tether, with its stablecoin USDT, is among the biggest creditors of the US state, with more than US$141 billion in US Treasury bills, and is making almost as much profit as Goldman Sachs, one of the largest global investment banks, means that the topic has significant geopolitical relevance.

He also pointed out that the largest issuers are pegging to the US dollar, accounting for approximately 98% of total stablecoin market capitalisation. This is strengthening the currency’s role in global trade and extending its reach into emerging markets – but also developed markets like the EU.

“With the vast amount of stablecoins denominated in US dollar, trades happening in the EU are also being settled in US dollar. This means that European organisations like the European Central Bank have no power over the trades being made,” he argued, equating the situation to a “digital petrodollar” through which the US is attempting to maintain its global financial dominance, as in the 1970s.

The EU has lagged behind the US in stablecoin initiatives mainly because of its focus on developing a clear regulatory framework, according to Laurent Marochini, CEO of Luxembourg, Standard Chartered, which offers digital asset custody services to institutional clients.

With greater clarity as a result of the Markets in Crypto-Assets Regulation (the transitional phase ends on July 1), new initiatives are cropping up, including Qivalis, which launched last year at Sibos in Frankfurt with 25 member banks and recently added 12 more. 

Marochini highlighted digital asset custody as one of the use cases coming to the fore in Europe. “Many corporates are looking for digital asset custody, as well as facilitating treasury by using stablecoins to make payments at the weekend, for example. These are key topics for corporates,” he said.

The panel agreed on the need for greater harmonisation in standards and interoperability. “If an institutional investor is working in 50 countries and settling in five currencies, we will need greater interoperability in future to realise the full potential stablecoins offer,” said Marochini.

“We also require the mutual acceptance of other regulatory regimes, as that opens up trade,” added Seiter. “Today, it’s not a level playing field – some jurisdictions with higher restrictions are competing with unregulated ones in the same market.”

Tony McLaughlin, CEO, Ubyx, a clearing system for digital assets, outlined his vision for interoperability without fragmentation. He compared the immature market structure of tokenised money to the dawn of credit cards, when US dollar credit card issuers dominated the market.

“Today, there are thousands of credit card issuers and no fragmentation. It’s a pluralistic market structure where cards of all currencies coexist. This is the fate of tokenised money – there will be stablecoins, tokenised deposits and central bank digital currencies from many issuers,” he explained. “What will unlock the market isn’t a function of issuance, but one of acceptance. We’re moving towards a market structure where anyone can be an issuer.”

Corporate demand

As Marochini indicated, there is growing interest among corporates in a future where payments are programmable, global, and more efficient. On another panel, ‘Unlocking Value: Digital Assets in Institutional Payments’, Juan Carlos Rodriguez, Senior Director, Fintech Commercial, Booking.com, outlined how the online travel marketplace was deriving value from digital assets.

Booking.com operates in almost 90 countries with 4.4 million commercial partners across the world, of which more than three million are small enterprises. The platform’s parent company, Booking Holdings, operates an e-money institution in Europe to handle payments and issue virtual cards.

Many of its smaller partners aren’t able to accept digital payments, so will instead accept bank transfers. However, bank transfers in some countries might take a week and don’t happen at the weekends. “Many partners need the money for working capital flows. It can be quite painful for a small hotelier, for example, to receive payment when the guest checks out and then wait a further seven days for the money to land in their account,” explained Rodriguez.

The travel platform is using stablecoins to help partners run faster – they can receive money in real-time, 24/7, with amount certainty and without losing money through fees and FX. “We’re improving the working capital cycles of our partners,” said Rodriguez.

Booking.com has also enabled stablecoin accounts for travellers via its partnership with Crypto.com. People can save money before they travel via stablecoin, for example, if they are in a country with significant currency depreciation.

But while both partners and travellers are asking for faster payments/payouts, they aren’t explicitly demanding stablecoins, Rodriguez reported. As such, the ease of converting digital assets into fiat currencies, or off-ramping, is critical for driving adoption. “If we tell people to bring their own stablecoin wallet, probably not many will do it,” he said. “We need to embed a wallet on the platform with some off-ramping capability – that’s how far we will have to go to solve the problem. Just saying we can pay them in stablecoin won’t move the needle.”

He believes that stablecoins should act as an invisible payment rail – and the more invisible and transparent the rail is, the better. “The end user cares about receiving their money quicker, not about which payment rail is used,” he said.

Within three to five years’ time, Rodriguez hopes it becomes possible to move the entire payment workflow onto a stablecoin rail and connect seamlessly to banks. He believes that interoperability on a global scale is key to getting the most out of stablecoins in the payments space.