Blending Stablecoins and Tokenized Deposits for Cross-Border Payments

Writer

Petter Sandgren

CEO

The debate around stablecoins versus tokenized deposits, and private versus public blockchain networks, continues to play out across media, panels, and industry forums worldwide. Both stablecoins and tokenized deposits offer different ways to move value across borders using tokenization and blockchain technology, each with clear strengths and trade-offs.

But is it really a choice between one or the other? Or could a hybrid approach combine the best of both worlds?

Stablecoins: Speed and Global Reach, With Trade-Offs

Stablecoins are typically issued by private entities such as Tether or Circle and operate on public blockchain networks. They enable corporations and individuals to move funds globally in near real time, often at a lower cost than traditional rails.

Stablecoins can be acquired at the point of payment, removing the need for prefunded accounts, and can be sent directly to a recipient’s wallet without intermediaries.

However, this flexibility and level of disintermediation also introduce meaningful challenges.

With no banks or regulated intermediaries in the transaction flow, there is limited oversight to prevent illicit activity such as money laundering or to enforce capital controls. In several countries, this has resulted in stablecoins being restricted or outright prohibited, as funds can be transferred to anonymous wallets abroad.

In addition, off-ramping stablecoins into fiat currency remains costly in many markets. These costs are often embedded in FX spreads, reflecting the reluctance of traditional banks and payment providers to support stablecoin payouts.

As a result, a payment that appears inexpensive on-chain can ultimately become more costly than a traditional SWIFT transfer, where it is permitted at all.

Tokenized Deposits: Where Compliance Meets Efficiency

Tokenized deposits are issued by banks and backed by traditional bank deposits or other bank liabilities. These tokens typically operate on private networks and are exchanged between regulated financial institutions.

Payments follow established AML, sanctions screening, and compliance processes, while still benefiting from blockchain technology. This enables near-instant, low-cost settlement and removes the need for intermediaries such as correspondent banks and SWIFT.

This model is generally well accepted by regulators globally, as transaction flows remain fully screened and capital controls are enforced. Lower risk also translates into reduced off-ramping costs, making it easier for large banks to support payouts and FX services.

Contrary to how tokenized deposits are often discussed in media and industry panels, their benefits are not limited to large banks or closed banking consortia. When delivered through a bank-neutral payment infrastructure, tokenized deposits can also be leveraged by payment service providers and smaller banks.

That said, operating on closed, private networks introduces rigidity. Participants must be onboarded in advance, only banks can initiate payments, and transactions typically require prefunding, limiting flexibility and speed in certain cross-border use cases.

Why the Future Is Hybrid, Not Either-Or

Rather than choosing between stablecoins and tokenized deposits, the optimal cross-border payment infrastructure combines the strengths of both.

• Stablecoins offer speed, flexibility, and global reach at the point of collection.

• Tokenized deposits provide regulatory acceptance, controlled risk, and efficient payouts.

Together, they form a more resilient and scalable model for modern global payments.

How Centiglobe Enables Hybrid Cross-Border Payments

Centiglobe delivers this hybrid model through its global payment network built on tokenized deposits. The network enables competitive payouts worldwide and extends reach into markets where stablecoins are restricted or not accepted.

As a result, Centiglobe Connect has seen growing demand from global payment service providers that operate with stablecoins but require reliable, compliant payout capabilities.

In this model, funds are collected and on-ramped using stablecoins, while payouts are executed via tokenized deposits across Centiglobe Connect’s global network. This approach combines the flexibility of stablecoins with the regulatory confidence and scale of bank-issued money, delivering the best of both worlds.

Contact us to learn how Centiglobe can help you modernize your cross-border payments.