Payments

Why tokenise? i

Paying someone today means asking a bank to update its books, which then passes the instruction along a chain of other banks, in business hours. A payment token (a stablecoin, a bank deposit token or central-bank money on a ledger) moves straight from payer to payee on a shared ledger, in seconds and at any hour, and the ledger itself records the new balances. This is the overview; the payment types below (cross-border, domestic, programmable, card settlement, merchant payments, payouts) each have their own page.

Improves an existing process Moving money is the most basic thing a financial system does, so tokens improve an existing activity rather than create a new one. What changes is who has to be involved and when it can happen: a stablecoin moves directly between two wallets, much like handing over cash, while bank deposit tokens (Citi, J.P. Morgan, DBS, HSBC) move instantly between clients of the same bank, around the clock. Much of the stablecoin volume so far is crypto trading rather than payments for goods, services or wages.

The problem today

• A payment is not money moving but a series of account updates: the payer's bank, the payee's bank and the central bank between them. Across borders this becomes a chain of correspondent banks, each step separate and each with its own messages.^[1]
• Bank transfers stop at cut-off times and weekends. Siemens says it moved to on-chain payments to get round limited settlement windows in its treasury.^[2]

Today vs tokenised (simplified)

End to end: hours to two business days → seconds to minutes, any day (within one ledger) · Crossing between ledgers or back into ordinary bank accounts can add back much of the time.

Benefits · 5, of which 2 evidenced

Who it suits

Bank, Fintech or technology firm, Non-financial company, Crypto exchange · effort: medium · one firm can get value on its own

• Corporates can start inside one bank's token service, moving cash between their own entities
• Firms using public-chain stablecoins need wallet custody, sanctions screening and accounting for crypto-assets

Limits and open questions

• Much of the activity is crypto trading, not the real economy. For 2025 BCG and Allium put adjusted stablecoin flows at about $1.5 trillion for investment and trading and $1.1 trillion for exchange activity, against $350 to $550 billion of real-economy payments.^[5]
• Stablecoins fail some basic tests of money: each is a claim on its own issuer, so prices can drift from face value, and pseudonymous transfers between unhosted wallets make them attractive for illicit finance.^[1]
• Each bank's token network is its own island. DBS and J.P. Morgan said in November 2025 that their clients could not yet pay each other on-chain, and began exploring a link between the two.^[6]
• Many competing, unconnected ledgers split money and liquidity, and the bridges between them add operational and technology risk.^[7]
• On-chain transfer volumes can be inflated by wash trading, where the same party moves money between its own addresses.^[7]