Banks Look Beyond a Single Stablecoin Winner as Tokenized Cash Tests Expand

Banks and large institutional clients are moving beyond the idea that one stablecoin will dominate tokenized finance, according to digital asset bank Sygnum. The firm says treasuries and asset managers want a setup where regulated stablecoins, tokenized bank deposits and tokenized money market funds can operate interchangeably on shared infrastructure.

The development matters because it frames tokenized cash less as a winner-takes-all contest and more as a plumbing challenge for institutions. If different cash-like instruments can move across one regulated network, companies could use them for settlement, cross-border flows and liquidity management without relying on a single product category.

Sygnum has been testing that direction with major Swiss financial institutions. The bank partnered with UBS and PostFinance last year to test blockchain payments between institutions on Ethereum, and this year joined UBS, PostFinance, Raiffeisen, Zurcher Kantonalbank, BCV and Swiss Stablecoin in a Swiss franc-backed stablecoin pilot.

The infrastructure debate is also changing. Sygnum argues that public-yet-permissioned models can connect institutions to broader on-chain finance while preserving regulated access controls, a contrast with the private-chain approach many banks have historically favored for privacy and counterparty oversight.

The bank-led push comes as Europe continues to debate the future of digital money. CoinDesk noted that Qivalis, a consortium of 37 large European Union banks, is also aiming to launch a digital euro before the end of the year, while European Central Bank President Christine Lagarde has argued that euro stablecoins alone will not solve deeper market issues. For Sygnum, that supports the view that stablecoins are only one part of a wider tokenized cash stack.