On-Chain Banking and the Next Phase of Financial Infrastructure

For decades, the global financial system has enabled businesses to trade across borders by prioritizing stability and regulatory oversight. Yet despite transactions becoming increasingly digital and global, the pace of settlement has remained largely unchanged. 

The way value moves across borders today reflects deep structural constraints. International wires operate within narrow windows, and payments often pass through multiple intermediaries before reaching final settlement. This architecture was built for an era of paper ledgers and limited communication. Today, it slows down businesses. While digital transactions promise immediacy, the underlying plumbing is still stuck in the past, anchored to banking hours, correspondent relationships and geographic fiat boundaries. 

The disconnect is no longer just an annoyance; it is a systemic risk for banks and financial institutions. In a digital-first global economy, payments cannot depend on legacy constraints. The most viable path forward is to move bank accounts and their core settlement functions onto public blockchains. 

Stablecoins revealed the gap

The evidence is already visible in how people and businesses move dollars today. Data from Artemis Analytics, reported by Bloomberg, show that stablecoins settled approximately $33 trillion in transactions in 2025. Even when automated trading and wash activity are excluded, a Transak report estimates roughly $9 trillion in genuine economic transactions, a figure about five times the annual volume processed by global platforms such as PayPal, which handled roughly $1.8 trillion in the past 12 months. The transaction volume itself serves as proof that people are acting, not just believing. When users can move dollar-denominated value across borders in seconds, at any time, they do so.

Stablecoins gained traction because they address a specific failure of legacy rails. Settlement today depends on bank reserve windows and correspondent networks that were never designed for continuous international commerce. 

Tether’s USDT and Circle’s USDC are now at the heart of that workaround. CoinGecko data show USDT with roughly $186 billion in circulation and USDC around $70 billion. According to Artemis, however, USDC processed a larger share of transaction volume in 2025. The distinction lies in their respective use cases: USDT dominates simple transfers and everyday payments, while USDC is more heavily used in trading, treasury operations and institutional flows. 

This trend extends far beyond cryptocurrency markets. Stablecoins already serve as useful dollar substitutes in countries facing inflation or capital controls, and they are progressively functioning as a settlement layer beneath corporate payments in developed economies. The old system no longer satisfies baseline requirements, and market behavior is adjusting accordingly.  

Regulators and institutions have also taken notice. In the U.S., the passage of the GENIUS Act moved payment stablecoins from a regulatory gray area to a recognized financial infrastructure, establishing federal standards around reserves and issuance. In Europe, the Markets in Crypto-Assets Regulation (MiCA) has done the same, creating a unified framework across E.U. member states. These moves signal that on-chain settlement is being formalized into the global financial system. 

As a result, institutions including Standard Chartered, Walmart and Amazon are now investigating stablecoin issuance or integration. This is not an experiment in retail. It’s a response to demonstrated demand and regulatory clarity.

On-chain accounts as the missing layer

These developments aren’t lost on traditional banks either. A Bank of America report from December 2025 outlined a multi-year move toward on-chain settlement, citing pilots at JPMorgan and DBS involving tokenized deposits. Meanwhile, the Office of the Comptroller of the Currency has granted conditional trust bank charters to select digital asset firms, while the FDIC and Federal Reserve are developing capital and liquidity rules for stablecoin activity under the GENIUS framework. 

Most bank initiatives, however, remain focused on internal or closed networks. Tokenized deposits can move faster than ACH or wire transfers, but they remain account-based liabilities that rely on interbank reserve settlement. Even JPMorgan’s JPMD model, which placed deposit tokens on a public blockchain, functions most effectively when both counterparties bank with JPMorgan. 

At the same time, crypto-native platforms are moving in the opposite direction, embedding traditional banking functions directly into digital asset infrastructure. Bybit’s new “MyBank” service, for example, allows users to hold and move fiat via IBANs while seamlessly converting funds into crypto. This inversion, banking embedded into crypto rather than crypto layered onto banks, reveals where user demand is heading. 

While self-custodied stablecoins solve speed and availability issues, they sit outside familiar frameworks for consumer protection, compliance and deposit guarantees. On-chain banking accounts offer a convergence point: regulated oversight combined with blockchain-native settlement. Account identifiers, balances and transaction logic can live directly on-chain. In that structure, stablecoins function as money within the banking system rather than alongside it. Settlement becomes continuous, reconciliation automatic and treasury visibility near-instant. Waiting days for confirmations becomes obsolete. 

Market data suggest this is far from niche. Bloomberg Intelligence projects stablecoin payment flows could reach $56 trillion by 2030, based on current usage trends. An EY-Parthenon survey found that more than half of institutional non-users plan to adopt stablecoins within a year. The demand signal is unmistakable.  

Banks risk becoming optional

Currently, banks still benefit from deep credit relationships, interest-bearing accounts and deposit insurance. Proponents argue that once interbank tokenized deposit networks hit maturity, they will meet market demand. But that view underestimates the settlement bottleneck. As long as payments require reserve movement at each hop, delays are inevitable. Stablecoins bypass that constraint entirely. When rails fail to meet user expectations, the structural advantages of traditional institutions erode. 

These concerns are legitimate, with even the International Monetary Fund recently warning that large-scale stablecoin adoption could affect bank funcing and monetary policy transmission, urging regulators to monitor risks closely in its most recent 2025 departmental paper.

Yet, preserving slow rails out of caution is not the solution. The goal is integration: bringing on-chain accounts into regulated banks governed by capital, liquidity and compliance standards. This keeps activity within supervised institutions rather than pushing it into parallel systems. 

Payments at internet speed

International trade already operates outside of regular business hours. Payments ought to as well. Stablecoins have demonstrated that continuous, programmable settlement is achievable. Tokenized deposits show how banks can adapt existing products to blockchain networks. On-chain banking accounts connect those threads into a system designed for real users, not just pilot programs. 

The debate over whether blockchains belong in payments is effectively settled—by transaction volumes, institutional pilots and regulatory frameworks. What remains unsettled is architecture. 

Either bank accounts move onto open settlement layers, or users will continue routing around legacy systems. In a digital-first economy, there is little tolerance for anything slower.