Zelle expands to India; readies bank-backed stablecoin

Zelle, the U.S.-based person-to-person payments network run by a consortium of banks, is expanding into India and developing a bank-backed stablecoin for a planned global rollout. The company says the effort aims to speed cross-border transfers and provide a settlement option for banks and customers.

The company has begun agreements with Indian banks and payment providers to link Zelle’s real-time rails with India’s domestic payment systems. The initial phase will connect participating Indian banks and fintechs to Zelle’s platform, allowing customers in India and the United States to send and receive funds faster than through correspondent banking channels.

The proposed stablecoin will be backed by deposits or short-term bank assets held by regulated banks and governed by the consortium that operates Zelle. The token is intended to act as a settlement layer for cross-border transactions and to enable near-instant settlement and lower transfer costs.

Operational plans call for integrating the stablecoin into partner banks’ mobile and online platforms so customers can convert fiat into the token for cross-border moves and redeem it back into local currency on receipt. Zelle plans to pursue interoperability with existing payment rails so the token can operate alongside traditional clearing systems.

Zelle is working with banking partners on custody arrangements, reserve management and compliance controls, including know-your-customer and anti-money-laundering checks, to meet requirements in the jurisdictions where it will operate. The rollout timetable is contingent on approvals from financial authorities and meeting local operational standards; the project will proceed in phased pilots and regional launches.

Targeted use cases include remittances, business-to-business payments and merchant disbursements that require fast settlement. A Zelle spokesperson described the stablecoin as intended to ‘offer near-instant settlement, lower costs and clearer oversight for regulators and banks.’