The Payments Industry Inflection Point: Part 2 Asset Digitization, Stablecoins & the Evolution of System Modernization
The payments industry has long been a proving ground for technological change. Cards gave way to digital wallets; batch settlement gave way to real-time rails; and so on. While each wave was significant, they were largely a single vector of disruption. What's happening now is different, with two distinct vectors of disruption simultaneously pushing the industry to an inflection point.
In Part One of this conversation, Michael Nelhams, EPAM's Head of Open Banking and Payments, and Chinmay Jain, VP Client Partner, Financial Services at EPAM, discussed the first vector of disruption: agentic payments. In Part Two, they explore the second vector: the digitization of assets like stablecoins, and what it means for system modernization across the payments industry.
On the Maturation of Stablecoins
Q: A year ago, the digitization of assets felt like proof-of-concept territory. Now banks seem to be taking it very seriously. What's changed, and what are the real use cases you're seeing?
Chinmay Jain: The shift is real. A couple of years ago, most discussions were exploratory. Now we're seeing production use cases emerge. The GENIUS Act, passed by the U.S. Congress in July 2025, established a regulatory framework for payment stablecoins and gave banks and institutions in the U.S. the confidence to build and scale. This rapid scaling isn't technology-driven; it's confidence-driven, with institutions now feeling the regulatory environment is becoming more stable to move forward.
From a payments perspective, the first U.S. use cases are likely to be in cross-border remittance, where the cost and friction of correspondent banking are well-understood problems. Beyond that, we're seeing early traction in B2B settlement, supplier payments and treasury liquidity management, where the speed and predictability benefits are most immediate. Our 2026 Consumer Banking Report found that 28% of respondents globally have invested in crypto, with that figure rising to 41% among Gen Z. Importantly, consumers trust banks more than fintechs or big tech companies for digital asset custody, which positions banks and payment providers well.
Michael Nelhams: Since the early 2020s, major global banks have been building out DLT-backed tokenized asset solutions, partnering with blockchain platforms on private chains. This has been shared with their clients such as Asset Managers with Tokenizing Bonds and other assets. In the last couple of years, this has become more mainstream and of interest across not just wholesale and investment banking.
From a European perspective, the Markets in Crypto-Assets Regulation (MiCA) provides a framework for stablecoin authorization, though it still has gaps, particularly around decentralized finance and self-custody wallets. One structural tension in Europe is that, as of now, 97-99% of stablecoins are linked to the U.S. dollar, which means the center of gravity remains in the U.S. even as European usage grows.
The conventional criticism was that blockchain was too slow to support payments as the industry moved towards instant payments and that distributed data offered no clear solution advantage for the use cases being put forward. That narrative is changing. Public networks have matured, security protocols are proven and the cost of processing on-chain can be lower than traditional alternatives while providing greater traceability and near-real-time settlement. Central banks have started to tokenize sovereign bonds and gilts, issuing them through exchanges for major banks to distribute. Those instruments need settlement infrastructure, and stablecoins are an increasingly credible option for this purpose.
On Stablecoin Settlement for Cross-Border Payments
Q: How does this connect to cross-border settlement specifically?
Michael Nelhams: The correspondent banking model for cross-border payments is costly and slow. According to Federal Reserve research, over 60% of wholesale payments are routed through one or more intermediaries. The number of active correspondent banks has also declined by approximately 30% over the last decade, increasing concentration and costs for smaller institutions.
Stablecoins offer a potential different settlement model. Instead of routing through a chain of correspondent banks, which involves multiple fees, time delays and redundant compliance checks, a stablecoin transfer can settle within seconds. In the U.S., JPM Coin and USDC are being used for settlement. In Europe, expanding from the U.K., Fnality looks to be the front-runner as a settlement network. Swift also launched a ledger settlement solution in July in partnership with 17 banks. At the same time, Ripple has been on the market for over a decade but hasn't grown to a level where it is considered as critical infrastructure. The technology has been proven but the volumes whilst growing are still small.
The infrastructure isn't fully in place, but the business liquidity benefits for wholesale banks are very significant. An estimated $10 trillion in capital is locked up in pre-funded settlement accounts, which can take one to three days to clear. Freeing up that capital through stablecoin settlement or stablecoin assisted settlement in around 10 seconds provides banks a huge opportunity to deploy that collateral in much higher-returning activities.
I can see a model where a stablecoin bridge will connect National RTGS solutions. The settlement instruction on the stablecoin bridge is trusted and fully traceable, which central banks can use to move the funds within country.
Chinmay Jain: The regulatory clarity provided by the GENIUS Act, along with the upcoming CLARITY Act currently under discussion, makes this a credible path for U.S. institutions. On the CBDC side, as of mid-2026, there are three retail CBDCs in live production globally, with 41 in pilot. Most major advanced economies, including the U.S. and the UK, have chosen to prioritize regulated private stablecoins over retail CBDCs, with wholesale CBDCs reserved for interbank settlement. For payment providers, the opportunity is to build the infrastructure that enables their issuer and merchant clients to participate in this new model.
On Modernization Within the Payments Industry
Q: Given all this disruption, what does true payments modernization look like in this environment, and where are organizations still getting it wrong?
Chinmay Jain: Modernization used to mean replacing a mainframe or migrating to the cloud. Now it means making infrastructure AI-ready and multi-asset ready, and that requires change at every layer. It's not a technology migration project anymore; it's more a matter of business model transformation. That starts with data: A data-first architecture is foundational because AI won't function effectively on poor-quality data. It also requires deeply embedded AI in fraud and decisioning, and the creation of an orchestration layer capable of managing increasingly diverse and dynamic components. In EPAM's 2026 Consumer Banking Report, 51% of consumers cited 24/7 support and 50% cited faster transactions as key to the best digital banking experience, a clear signal that legacy infrastructure is no longer fit for purpose.
Michael Nelhams: What we're seeing with clients closely mirrors what happened with APIs during the open banking era. Banks let individual developers build their own APIs independently, or each separate project built their own specific APIs. The result was a sprawling, undocumented tangle that cost millions to rationalize. The same pattern is emerging with agents right now. Developers inside organizations are building individual agents for specific projects, using different standards, with no shared governance. The experimentation phase is over. Organizations need to establish enterprise-level standards for agent development, create shared agentic services within their own environments and ensure that what gets built can be trusted in production. That requires governance first, not as an afterthought.
Closing Thoughts
Q: Given all the ground we've covered, what's your key message to leadership within the payments industry?
Chinmay Jain: The industry is entering a genuinely new chapter. Agentic commerce will fundamentally change how payments work, and digital assets will accelerate that change further. The shape of money is changing. For payment providers and all parties in the chain, the actions are clear: build the trust frameworks, treat modernization as a business transformation rather than a tech refresh, build orchestration layers and assess AI readiness. Finally, think carefully about how AI and digital assets work together to drive the future.
Michael Nelhams: The single most important message I think is don't treat agentic AI as an experiment that can continue indefinitely at the project level. Governance has to come first. If your organization is already running multiple agent projects in parallel without enterprise-level standards, you're building tomorrow's spaghetti infrastructure today. The stakes of getting this wrong are high, and the window to get ahead of it is closing faster than many might anticipate.
