Bain & Company report: Stablecoins will lead the rewiring of wholesale banking
Stablecoins and other types of digital money like tokenized deposits have transitioned from speculative crypto tools into essential strategic assets for wholesale banking, according to Bain & Company.
These digital cash instruments are now being deployed to solve deep-seated friction within the global financial system, particularly regarding trapped capital and complex cross-border transactions. While these assets once served primarily as back-office plumbing for digital asset trading, they are now a priority for multinational corporates and major financial institutions.
Stablecoins are digital representations of traditional currencies that maintain a stable value by being pegged to national currencies like USD. They can function as programmable liquidity tools that allow for the near-instantaneous transfer of value across borders without the delays and costs associated with traditional banking intermediaries.
Structural frictions translate into significant costs for wholesale banks when it comes to the movement of money. The most persistent frictions include cross-border or foreign exchange (FX) liquidity, derivatives margining absorbing significant liquidity, and corporate treasury operations remaining segmented across subsidiaries and currencies.
The report highlights that the primary driver for this shift is the inherent inefficiency in current wholesale banking structures. Persistent risk exposure and the requirement for pre-funded liquidity continue to tie up massive amounts of capital.
For example, the Bank for International Settlements noted that $9.6 trillion is traded daily in foreign exchange markets, yet much of this settles without sufficient protection. This creates settlement gaps and requires banks to maintain idle balances in various jurisdictions, reducing overall capital velocity.
Addressing the liquidity crunch
Bain & Company identifies three primary areas where digital money can provide immediate relief. First, foreign exchange settlement in emerging markets offers a practical starting point. By using stablecoin-based mechanisms, banks can achieve near-synchronous settlement, which reduces principal exposure and the need for large pre-funded accounts.
Second, tokenized collateral in derivatives markets can help compress exposure windows. Even a small reduction in the margin period of risk can translate into billions of dollars in reclaimed liquidity for banks with large inventories.
The third domain involves corporate treasury operations. Many multinational companies currently manage fragmented cash pools across several subsidiaries and banking relationships.
The report indicates that trillions of dollars of idle liquidity are currently held globally in corporate accounts. Stablecoin rails allow for faster intercompany transfers and liquidity sweeps, enabling treasurers to move value across borders without the delays typical of the traditional correspondent banking system.
Integration and compliance challenges
The transition to a digital cash architecture is not without its hurdles. The report emphasizes that the binding constraint for scaling these flows is no longer technical throughput, but rather seamless compliance and data integration.
To reach enterprise scale, banks must ensure that blockchain analytics and wallet verification meet rigorous standards. Compliance frameworks must operate consistently across both on-chain and off-chain environments to satisfy regulatory requirements.
The report projects that the supply of stablecoins could grow up to 12-fold by 2030. However, this growth depends on how effectively institutions can synchronize new technology with existing risk frameworks. The report suggests that banks should first focus on building custody capabilities and compliant wallet orchestration before moving toward proprietary issuance.
The advantage of early adoption
As the financial industry undergoes this ‘great rewiring’, the report warns that complacency may be the greatest risk for established players. Because wholesale settlement infrastructure relies heavily on network effects, those who engage early will have the power to define interoperability standards and influence regulatory developments. Latecomers may eventually join these networks, but they will likely do so on terms established by their competitors.
Ultimately, AI and programmable settlement are reshaping the economics of money movement. While the transformation of wholesale banking will not happen overnight, the incremental efficiency gains are already compounding. Institutions that participate in the design of these new settlement networks will be the best positioned to capture the value created by increased capital velocity and reduced operational complexity.
