Stablecoins Get the Headlines. Tokenized Deposits Get the Job Done
- Petter Sandgren
- Oct 9
- 3 min read
Writer
Petter Sandgren CEO
Financial markets have always had a fascination with the “next big thing.” From derivatives to digital assets, each wave of innovation promises to revolutionize the world. But history shows that excitement often outpaces understanding. Hype builds quickly – sometimes faster than the ability to answer a simple question: does this actually solve the problem we set out to fix?
Today, that “next big thing” is stablecoins. The U.S. GENIUS Act has made them the centerpiece of discussion at fintech conferences and policy roundtables alike. Industry leaders are now debating how tokenized money could transform cross-border payments, and while there’s plenty of hype, there’s also genuine innovation worth examining.
But here's what concerns me: in all the excitement about stablecoins, we're glossing over their practical realities, the costs, the risks, and frankly, whether they're the right tool for the mission. Even more troubling, we're ignoring tokenized deposits, which deliver the same benefits without many of the downsides.
The Risks Everyone Knows About
The risks of privately issued stablecoins have been well documented in the debate but are still important to highlight. Privately issued stablecoins can not be compared to high grade securities or the balance sheet of a global, systemically important financial institution. They're privately issued instruments, which means their stability depends entirely on the issuer's financial health regardless of their backing. What if interest rates decline again and some large stablecoin issuers are tempted to go into higher yielding and riskier assets?
Would the authorities bail out such a company? Regulation helps, but building critical financial infrastructure on private issuers feels like an unstable foundation.
As long as fiat currencies remain the world's dominant store of value, and they will for the foreseeable future, these conversion costs from onramping/offramping aren't going away.
The Cost Problem Nobody Talks About
What gets less attention are the hidden costs. To use stablecoins, you need to convert fiat currency into tokens and later exchange them back. These "on-ramp" and "off-ramp" processes aren't free – they create friction and expense. Add compliance costs such as sanction-screening and AML processes, plus FX spreads on cross-border transfers, and you're often looking at costs comparable to traditional remittance services. As long as fiat currencies remain the world's dominant store of value, and they will for the foreseeable future, these conversion costs from onramping/offramping aren't going away.
Why Tokenized Deposits Make More Sense
There’s a smarter and more compliant alternative available today – tokenized deposits on permissioned blockchain networks.
Familiar and safe: Tokenized deposits are bank funds represented digitally via distributed ledger technology (DLT) – not a new asset class. No exotic risks, just faster and more efficient movement of money.
Trusted and compliant: This model preserve the trust and regulatory oversight of traditional banking while fitting seamlessly into existing risk, compliance, and accounting systems.
Regulator-friendly: Unlike stablecoins, which raise concerns about capital flight and control circumvention, tokenized deposits align with central bank priorities, making adoption more feasible – especially in emerging markets.
Ready for adoption: Compared to stablecoins, tokenized deposits deliver lower costs, stronger compliance alignment, and are built for real-world integration – combining the stability of traditional finance with the efficiency of blockchain innovation.
Do you think the potential in stablecoins for cross-border payments is exaggerated?
No – it has just gotten started
Not long term, but for now tokenized deposits are better
Yes – it's another hype that will fade
Not sure
At Centiglobe we leverage blockchain technology within the regulatory system
At Centiglobe, we've chosen to work with tokenized deposits precisely because they offer institutional-grade trust and regulatory alignment. Our platform lets banks and payment providers move value instantly across borders through one API, giving member banks direct access to a global marketplace of peers.
The result? No intermediaries. No scattered pre-funding. Just predictable, traceable, cost-efficient cross-border payments that free up capital and reduce operational complexity, all while operating within existing regulatory frameworks.
Stablecoins will continue to evolve, and they may find their place in the future of finance. But for organizations that need to move money globally today, tokenized deposits offer a credible, proven alternative that works within the system rather than around it.