Big banks are ditching private blockchains to build tokenized cash networks on public infrastructure

Banks are focusing on pulling stablecoins and tokenized forms of more traditional financial instruments into one integrated package to meet growing institutional demand for multi-asset flexibility.

Rather than waiting for a single winner to emerge, large asset managers and corporate treasuries are demanding a multi-instrument setup in which stablecoins, tokenized bank deposits and tokenized money market funds all run on the same infrastructure.

“The demand from institutional clients is consistent: they are not waiting for any single instrument to prevail,” Thomas Eichenberger, chief strategy officer and deputy group CEO at Swiss-based digital asset bank Sygnum, told CoinDesk on Thursday in an email.

“They are asking how tokenized deposits, regulated stablecoins, and tokenized money market funds can be combined and made interoperable, so a treasury function can move between them — permissioned settlement, 24/7 cross-border flows, yield with on-demand liquidity — under one regulatory framework they already trust,” he added.

Sygnum, which describes itself as the world’s first digital assets bank, partnered late last year with Swiss banking powerhouse UBS and PostFinance, a subsidiary company of the state-owned Swiss Post, to test blockchain payments between institutions on Ethereum.