Banks weigh infrastructure, liquidity in digital currency race

Finextra and CGI will host a webinar moderated by Scott Hamilton to examine how banks can position themselves in the digital currency race. The panel will cover infrastructure, settlement, liquidity and control issues across central bank digital currencies (CBDCs), stablecoins and tokenised deposits.

On infrastructure, CBDCs typically require direct or intermediary access to central bank settlement systems and close integration with existing payment rails. Stablecoins operate on private rails and involve reserve management, custody arrangements and smart-contract-driven issuance and redemption. Tokenised deposits are bank liabilities recorded on a ledger and require links between a bank’s core systems and distributed ledgers for reconciliation, reporting and customer service.

The session will address on- and offboarding responsibilities, the technical and operational steps for minting and burning digital instruments, and how those processes affect reconciliation, audit trails and regulatory reporting when value moves between on-chain platforms and traditional systems.

Panelists will discuss liquidity and settlement implications. Instant settlement and cross-rail flows can increase demand for intraday liquidity, require settlement buffers or pledged collateral, and create new reconciliation workflows when transactions cross on-chain and off-chain environments. The webinar will consider how existing real-time payment systems change liquidity management needs.

Speakers will outline likely cost lines for banks, including minting and burning fees, settlement charges, custody expenses and the operational cost of maintaining parallel systems. Additional budgets may be needed for expanded compliance teams, new liquidity lines, insurance and enhanced reconciliation tools, particularly for cross-border operations where reporting requirements differ by jurisdiction.

Control and governance will be a key topic. Where parts of the payments chain-such as smart contracts, token platforms or alternative settlement rails-are outside a bank’s direct control, banks must define which functions to retain and which to outsource. The panel will examine governance and monitoring of third-party relationships with technology providers, custodians and node operators. Customer-facing responsibilities, including onboarding, KYC and compliance oversight, are expected to remain with banks.

The discussion will move from use cases to implementation choices, mapping specific operational requirements and potential product and service avenues for banks. These include custody for tokenised assets, settlement intermediation, liquidity provision and compliance-as-a-service, along with the internal guardrails and audit controls needed to operate across differing regulatory regimes.