Banks Seek Profitable Roles in Digital Currency Infrastructure

A Finextra webinar hosted in association with CGI brought together payments and bank technology leaders to examine infrastructure, settlement, liquidity and control issues for digital currencies. Panelists included Sean Devaney of CGI, Naveen Mallela of Standard Chartered, Vincent Lau of HSBC and moderator Scott Hamilton.

Panelists outlined technical and operating differences across CBDCs, stablecoins and tokenised deposits. CBDCs rely on central bank rails and close links to wholesale settlement systems. Stablecoins run on private issuer infrastructure and depend on issuer reserve arrangements. Tokenised deposits are bank liabilities recorded on distributed ledgers that can exist on external platforms.

Onboarding and offboarding processes differ by model. Banks are expected to retain customer-facing roles such as KYC/AML, deposit-taking and client relationship management. Platform providers may handle token issuance, wallet provisioning and some ledger services. Minting and burning mechanics vary: CBDC issuance is controlled by central banks, stablecoins are minted by private issuers backed by reserves, and tokenised deposits require conversion processes between traditional ledgers and token ledgers. These differences create distinct reconciliation and operational flows that affect costs.

Settlement and liquidity implications were a major topic. CBDCs that settle on central bank accounts provide payment finality and direct access to central bank liquidity. Stablecoins and tokenised deposits operating on private networks can speed payments but often lack direct access to central bank balances, which can force banks to hold extra liquidity or use correspondent relationships for settlement finality. Panelists warned that widespread real-time payment habits compress intraday liquidity and that tokenised instruments could increase intraday volatility unless new liquidity management tools are developed.

Speakers identified hidden costs including integration between distributed ledgers and legacy systems, transaction and smart-contract fees, collateral and reserve management, and the operational burden of monitoring external platforms. Banks may face higher compliance and legal costs when products cross multiple jurisdictions. The panel noted potential contingency costs for unwinding tokens or handling platform outages, and recommended contractual protections and liquidity backstops.

Control and governance over digital money were raised as operational risks. When payment rails or custody run on systems outside a bank’s control, banks will need service-level agreements, operational audits and continuous monitoring to meet regulatory and risk obligations. Outsourcing custody, node operation or token issuance can speed market entry but increases dependency on third parties and raises questions about incident response, data access and auditability. Panelists said banks are likely to retain balance-sheet decisions, regulatory reporting and client onboarding while outsourcing specialised technology layers.

Panelists identified service and product opportunities for banks, including issuing tokenised deposits, providing custody and staking services, offering liquidity management and market-making for stablecoins, and building programmable payment services for corporate clients. They highlighted potential revenue from integration services that connect central bank systems and private token platforms, and from combining traditional credit products with programmable money features.

On regulation, panelists pointed to renewed policy interest in stablecoins following the US GENIUS Act proposal and said that regulatory clarity is still developing. They recommended that banks run pilot projects, engage regulators proactively and establish internal governance frameworks that can adapt across jurisdictions and varying custody, reserve and consumer-protection rules.