Over the past few days, FMI NEWSROOM has been following several developments with a common underlying theme.
Singapore has moved its stablecoin framework towards legislation, putting reserve backing, redemption, resilience and operational controls around regulated private money. The European Central Bank has set out the next stages of Pontes, its infrastructure for settling tokenised transactions in central-bank money. In Australia, the Reserve Bank is looking at how RITS should evolve to support tokenised wholesale assets and new forms of digital money.
Together, these are one story about money, not technology.
As financial assets move onto programmable infrastructure, somebody still has to provide the cash leg. That is creating a contest between stablecoins, tokenised commercial-bank deposits and central-bank money.
How those forms coexist could determine much of the architecture and economics of the next generation of financial market infrastructure.
Stablecoins opened the door
Stablecoins arrived with one obvious advantage: they were already digital-native.
They can move around the clock, sit directly on programmable ledgers and be exchanged alongside tokenised assets without necessarily passing through conventional payment infrastructure.
That makes them attractive wherever traditional money cannot easily follow the asset onto the new rail.
But moving from crypto markets into financial-market infrastructure changes the test completely.
An institution using a stablecoin to settle a securities transaction needs reliable redemption at par, liquid and protected reserves, operational resilience, legal certainty, financial-crime controls and a clear answer to what happens when the issuer fails.
Singapore's proposed framework illustrates that shift. Stablecoin regulation is becoming less about policing a crypto product and more about determining which private money is robust enough to be allowed into the payments and settlement system.
Once a stablecoin becomes settlement money, its issuer is no longer merely selling a digital token. It is potentially sitting inside the plumbing of financial markets.
And that is a valuable place to be.
The banks have an answer
Commercial banks have little incentive to surrender that position.
Their response is the tokenised deposit: conventional bank money made programmable.
A tokenised deposit remains a liability of a regulated bank. Banks retain the customer relationship and deposit economics, while interbank obligations can still ultimately settle in central-bank money.
The Bank for International Settlements has made the strategic divide particularly clear. Its preferred model is one in which tokenised deposits carry much of the payment and wholesale-settlement load, with central-bank money remaining the anchor. Stablecoins could coexist, but in more specialised roles.
Australia's Project Acacia has effectively been testing this competition in practice.
Its wholesale-market experiments used stablecoins, tokenised bank deposits, existing Reserve Bank settlement balances and a pilot wholesale central bank digital currency. The lesson was not that one instrument had already won. Rather, different forms of digital money could support tokenised markets, while the settlement infrastructure connecting them remains crucial.
That is why the RBA's next question is about RITS.
Central banks are coming on-chain
Europe is going further.
Pontes initially links market distributed-ledger platforms to TARGET Services, allowing the cash leg of tokenised transactions to settle in central-bank money. But the European Central Bank's ambition now goes beyond a bridge.
Pontes is intended eventually to provide settlement finality on a Eurosystem-operated DLT platform, add programmability and move towards round-the-clock operation. Appia is examining the wider architecture into which that infrastructure might fit.
The strategic logic is straightforward. Central-bank money has no private credit or redemption risk and can provide liquidity elastically when markets come under pressure.
But there is another reason central banks care.
If the financial asset, the collateral, the smart contract and the liquidity all migrate onto programmable infrastructure while central-bank money remains somewhere else, private settlement assets gain an obvious structural advantage.
Central banks do not intend to let that happen by default.
The FMI question
London is now making that question tangible. The London Stock Exchange is examining tokenised UK equities, including how its Digital Securities Depository could support settlement and asset servicing, while linking regulated markets with digital-native distribution and wallets.
Once the security moves on-chain, the next question is unavoidable: what settles the cash leg — a stablecoin, a tokenised bank deposit or central-bank money?
The answer affects liquidity, collateral, finality and where value sits in the infrastructure chain.
Does a central counterparty accept tokenised cash or collateral and manage liquidity continuously rather than around today's settlement windows?
And if several public and private forms of money coexist across different networks, who provides the interoperability layer that makes them behave like one monetary system?
Those may become more important questions than which blockchain wins.
There may be no single winner
The emerging outcome looks less like stablecoins replacing bank or central-bank money and more like a new version of today's layered monetary system.
Stablecoins may prove useful where portability, open-network access or cross-border reach matter. Tokenised deposits have the advantage of sitting inside the existing banking and prudential architecture. Central-bank money is likely to remain the preferred ultimate settlement asset wherever transactions become systemically important.
The Bank of England is already leaving room for precisely that kind of coexistence. It continues to regard central-bank money as critical for wholesale final settlement, while allowing qualifying stablecoins to be considered as settlement assets inside its Digital Securities Sandbox.
So stablecoins may ultimately achieve something more significant than replacing conventional money.
They have forced conventional money to become programmable.
Banks are tokenising deposits. Central banks are putting settlement money onto new rails. Real-time gross settlement systems are being reconsidered. Regulators are defining which private tokens can safely sit alongside them.
The contest is no longer about whether tokenised finance will need money on-chain.
It is about whose money it will be — and who controls the infrastructure around it.
That is the strategy at play.
Sources — FMI NEWSROOM recent coverage; Monetary Authority of Singapore; European Central Bank; Reserve Bank of Australia; London Stock Exchange; Bank for International Settlements; Bank of England.