Can Asia’s banks make stablecoins work across borders?

HSBC recently held a series of roadshows in 11 markets across the Asia Pacific region, speaking to nearly 700 treasury and finance professionals to better understand their view on digital currencies and other topics.

Interest in digital currencies is certainly growing: 44% are very or somewhat likely to use digital currencies in the next two years. They are also clear what the benefits are: 55% stated that their #1 reason for adopting digital currencies is to increase efficiency, while 52% said it is to reduce cost.

However, interest is also bifurcated: 39% are unlikely to use digital currencies in the next two years. This polarisation underlines the fact that it is still early days for corporate usage of digital currencies.

We know from our client conversations that the single biggest barrier to their adoption of digital currencies is the lack of interoperability. This is understandable: in a region as diverse as Asia, rules and regulations around data and digital currencies differ from market to market.

Nevertheless, waiting for a perfect future state risks missing the learning curve. Treasury and finance teams who benefit most will run contained experiments today: narrowly defined use cases, clear controls, and measurable outcomes. HSBC is actively building on our digital-currency capabilities – particularly in Hong Kong and Singapore – to help clients navigate this next chapter with confidence.

At the same time, to move more clients from the sidelines onto the playing field, the financial industry as a whole needs to deliver interoperability. And the shift is underway: in August, HSBC completed the first inter-bank tokenised deposit transaction on Swift’s blockchain-based ledger, not only demonstrating interbank interoperability, but helping advance industry progress on 24/7 cross-border payments.

Treasurers clearly see the benefits of adopting digital currencies, whether it is increasing efficiency, reducing cost, or enhancing liquidity. Meanwhile, the progress we have demonstrated shows how tokenised deposits can work across financial institutions in a way that is secure, interoperable, and designed for real-world payment flows.

Clients agree that tokenised deposits and other types of digital currencies can solve real-world problems. Now it is incumbent on the industry to deliver interoperability, lest we create more digital islands.

Stablecoins have moved well beyond experimentation and are increasingly being used for treasury operations, settlement, cross-border transfers and payouts. As adoption grows, the conversation has shifted from whether stablecoins have a role to play, to how they can scale in a way that is secure, interoperable and useful for businesses and financial institutions.

One of the key questions facing banks is whether stablecoins can be adopted at scale without adding further fragmentation to the payments ecosystem. Our view is that stablecoins will be most effective when they operate as part of a broader financial infrastructure rather than as isolated networks, a unified approach matters. Businesses and consumers do not want more complexity. They want money to move seamlessly, regardless of the underlying technology. That is why interoperability matters. The long-term opportunity is not creating entirely separate payment systems, but connecting stablecoin capabilities with existing payment, settlement and money movement infrastructure to enable greater efficiency and choice.

The same principle applies across Asia Pacific, where regulatory approaches continue to evolve at different speeds. We are seeing encouraging progress across a number of markets, but regulatory fragmentation remains one of the industry's biggest challenges. For stablecoins to scale across borders, institutions will need common standards, trusted infrastructure and strong compliance frameworks that can operate across jurisdictions. Success will depend not only on technology, but also on collaboration between regulators, financial institutions, payment providers and the broader ecosystem. Interoperability, trust and governance will be just as important as the underlying blockchain infrastructure itself.

Cross-border payments are one of the areas where stablecoins have the potential to create meaningful value. Traditional cross-border payment flows can involve multiple intermediaries, business-hour limitations, settlement delays and operational complexity. Stablecoins can help reduce settlement friction, shorten settlement cycles and support the movement of value on a 7-day-a-week basis. This can be particularly valuable for organisations managing liquidity across multiple markets, currencies and time zones. We also see growing interest from businesses exploring stablecoins for treasury management, settlement and global payouts, where greater speed and operational efficiency can deliver tangible benefits.

That said, there is a lot more work to be done. Reducing cost and improving speed are important, but widespread adoption will ultimately depend on trust, regulatory clarity, compliance, operational resilience and the ability to move seamlessly between stablecoins and traditional financial systems. As the ecosystem matures, the greatest opportunity lies in creating interoperable infrastructure that allows stablecoins to work alongside existing payment rails and financial networks.

At Visa, we believe the future is not about replacing how money moves, but improving how it moves. Stablecoins represent an additional capability that can help institutions move and manage value more efficiently. The focus now is on building the infrastructure, standards and connectivity needed to support broader adoption. Whether for settlement, treasury operations, cross-border transfers or payouts, success will depend on creating solutions that are secure, scalable and connected to the wider payments ecosystem.

Can banks issue stablecoins at scale without further fragmenting payment networks?

The key condition for scale is interoperability. Stablecoins need to work as interoperable money, rather than becoming another collection of closed payment rails.

Institutions are tackling this in different ways. Some are using public blockchains for reach and liquidity while keeping institutional controls at the asset and execution layers, such as wallet permissions, compliance, auditability, and privacy. Others are choosing shared issuance and consortium models. Twenty-one international financial institutions recently committed to establish a stablecoin company, initially focused on USD and subsequently on additional G7 currencies, for uses including cross-border payments and digital-asset settlement.

Regulators and central banks are also part of the infrastructure story. Hong Kong’s Project Ensemble has moved into real-value transactions involving tokenised deposits and digital assets and is working toward 24/7 settlement using tokenised central-bank money. Project Agorá has demonstrated atomic multi-currency settlement using tokenised commercial-bank deposits and central-bank reserves.

Ultimately, scale will depend less on how many stablecoins are issued, and more on whether money and assets can move across an interoperable financial system.

How can Asian banks connect stablecoin systems across different regulatory regimes?

Asian banks should work on the assumption that regulatory differences will persist rather than wait for full harmonisation.

Most markets are moving in the same broad direction on licensing, reserves, redemption, AML/KYC, custody, and governance, but the detailed requirements still differ. Banks can build a common institutional control layer around identity, sanctions screening, wallet permissions, reserves, redemption, and data, then adapt access and transaction rules for each market. They also need the flexibility to restrict or reroute activity when local rules change.

Interoperability must cover both money and assets. Stablecoins, tokenised deposits, and central-bank money will coexist, while tokenised bonds, funds, and other securities increasingly move onto digital rails. Banks need money-to-money conversion as well as money-to-asset settlement across markets. In some models, compliance and privacy controls can remain at the asset or execution layer while institutions still connect selectively to public-chain liquidity.

For clients, this should still feel like one service, even when the rules underneath differ.

Will stablecoins significantly reduce the cost and time of cross-border payments?

The economics depend heavily on the corridor. Stablecoins can make a material difference where correspondent banking is expensive, settlement is slow, and local FX liquidity is thin.

Our analysis identified around US$350 billion to US$550 billion of observable stablecoin payments for goods and services in 2025. B2B was the largest segment at roughly US$150 billion to US$230 billion, or about 40% of the total. Much of the growth we see is coming from SMEs, online platforms, and cross-border businesses.

In some emerging market and smaller-currency corridors, our project work has observed traditional B2B transfers costing around 3% to 6% and taking one to five business days. Stablecoin transfers can settle almost immediately on-chain, although FX conversion, compliant on- and off-ramps, local liquidity, and fiat payout still add cost. Trade payments, supplier settlement, global payroll, and treasury flows are particularly interesting in these markets.

Not every corridor needs fixing. More than half of Wise transfers already settle in under 20 seconds, and around 90% of payments on major SWIFT GPI corridors settle within an hour. The better comparison is the full payment journey, not the blockchain fee versus the wire fee.

The bigger opportunity is liquidity. With 24/7 digital money, businesses can reduce cash held across markets, shorten working-capital cycles, and move treasury liquidity when needed. The biggest stablecoin savings may ultimately sit on the balance sheet, not on the payment fee, by turning a multi-day, pre-funded process into an always-on liquidity and settlement process

Can banks issue stablecoins at scale without further fragmenting payment networks?

While stablecoins have the potential to improve settlement speed and programmability, scaling them across borders will not automatically create a more integrated payments landscape. In the near term, existing fragmentation may become more pronounced as jurisdictions pursue different regulatory approaches, infrastructure models and market priorities.

Regulatory requirements for licensing, reserve management and compliance continue to diverge across markets, limiting interoperability between stablecoins issued under different regimes. At the same time, differences in blockchain networks, settlement architectures and governance frameworks may pose challenges to seamless cross-border transactions.

As a result, the key challenge is not simply scaling stablecoins, but building the interoperability, trust frameworks and cross-jurisdictional coordination needed for them to operate effectively at scale. While technologies such as cross-chain bridges can help connect networks, they do not fully address the structural sources of fragmentation.

How can Asian banks connect stablecoin systems across different regulatory regimes?

Asian banks are yet to be able to connect stablecoin ecosystems - there are current efforts to develop shared standards, interoperable infrastructure and greater regulatory coordination. Project Nexus, a multilateral initiative that connects domestic instant payment systems to support cross-border fiat currency payments, has already demonstrated strong demand for regional connectivity through its reliance on common infrastructure and multilateral arrangements. The stablecoin version of this network is yet to materialise in part due to cost, complexity and challenges in demonstrating a clear return on investment (ROI).

As digital asset markets mature, success will depend less on any single stablecoin and more on common frameworks, interoperable networks, and clear regulatory guidance that enable trusted and compliant cross-border transactions. Initiatives that have been under proof of concept evaluation like unified ledgers, universal digital payment networks and interoperable financial market infrastructure (FMI) will likely further strengthen connectivity across jurisdictions too.

Will stablecoins significant reduce the cost and time of cross-border payments?

Stablecoins have the potential to significantly improve the speed of cross-border payments by enabling near real-time settlement and reducing reliance on traditional correspondent banking networks. The impact on costs is likely to be more modest, as compliance, liquidity and operational requirements remain. While faster settlement and improved liquidity management could deliver meaningful operational efficiencies, substantial reductions in transaction costs are likely to take longer to materialise.

Can banks issue stablecoins at scale without further fragmenting payment networks?

That is possible if interoperability is built in from the onset as proprietary systems could only create new financial silos. While a single global infrastructure is unlikely, a connected ecosystem of networks, settlement assets and forms of money operating under common standards is more probable. Banks will need to be at the forefront of bringing a seamless experience to the client and build interoperability and orchestration combining the trust, reach and regulatory safeguards of banking with stablecoin efficiency and programmability

How can Asian banks connect stablecoin systems across different regulatory regimes?

The priority is interoperability: different forms of money, infrastructures and networks must work across traditional and digital environments. As regulations, payment systems and licensing requirements vary across Asian markets, innovation is likely to scale through connected ecosystems rather than a single standardised model. Common standards and evolving legal and regulatory frameworks will support scale and adoption. Banks with local expertise and cross-border capabilities can help clients benefit without adding complexity. Banks can act as trusted bridges between traditional rails, instant-payment schemes and emerging digital infrastructure.

Will stablecoins significantly reduce the cost and time of cross-border payments?

Stablecoins could reduce time and friction through faster settlement, greater transparency, programmability and potential 24/7 availability. They may also shorten transaction chains and improve liquidity mobility. However, the opportunity extends beyond speed: clients need real-time visibility, reduced pre-funding and more efficient liquidity movement across currencies, entities, networks and geographies. Stablecoins are therefore likely to coexist with correspondent banking, instant payments, tokenised deposits and other rails, allowing clients to select the safest, fastest and most effective option for each use case.

Stablecoins have the potential to transform cross-border payments, but their success in Asia will depend on a range of factors, including technological and regulatory interoperability. As jurisdictions introduce their own stablecoin frameworks, banks will need to navigate increasingly complex licensing, compliance and supervisory requirements across markets. Regulatory interoperability may therefore become an important enabler of cross-border adoption.