If you want to eat a salad, a spoon is a bad choice. Similarly, forks are very impractical implements for eating soup. My point is, sometimes you have to pick the right tool for the job. 

And this week, Zelle, the P2P payments brand created by the largest banks, announced their stablecoin, Zelle USD, for international payments. This came just a week after another consortium of banks, TCH, announced they'd build with tokenized deposits instead.

Why? 

Well. Context matters.

So allow me to bathe you in 1,500 words of context before I get to my point. 

Which is that stablecoins are becoming the rail above the rails. The layer everything else ends up riding.

Three words get thrown around like they mean the same thing. They don't:

Tokenized deposits are money that rests. Stablecoins are money that moves.

Zelle is one of the few examples of banks, through innovation by committee, succeeding as the largest P2P money transfer service in the United States, larger than Venmo or Cash App.  The parent company, Early Warning, is owned by seven banks: BofA, Capital One, JPMorgan Chase, PNC Bank, Truist, U.S. Bank, and Wells Fargo.

Domestically, Zelle is a juggernaut; it processed a total payment volume of over $1.2 trillion in 2025. This represented a 20% year-over-year increase, driven by a record 4.2 billion transactions across the network. It averages $3.4bn per day, and payments from small businesses are $347 billion (or roughly 30%) of the total volume.

Early Warning Services (EWS) is the parent company of Zelle; it developed and manages the Zelle network, but also operates the National Shared Database for financial institutions (only) to share data on fraud prevention. It also tracks information like overdrafts, bounced checks, and unpaid balances when you open a new account to help banks decide if they should let you in or not.

Critics say it’s a cartel because it doesn’t let non-banks in to the National Shared Database. But as a bank-owned and operated company, it’s fair to say EWS has been an effective investment by the banks, delivering on fraud prevention and P2P payments, and helping them innovate further. Like with stablecoins for example.

Banks hate losing market share.

The objective here is to grow Zelle's international transaction volume; stablecoins are just a useful path towards that goal. These large banks don’t have a Wise or Revolut-like offering for low-cost money transfers, and lose market share to those highly cost-efficient players.

Zelle, now a proven commodity and brand in the United States, likely has millions of existing customers who use 3rd-party services to remit funds to their families in their countries of origin. Given that 1) Zelle has proven it can defend its turf domestically on money transfer vs Cash App and Venmo and 2) International remittance is a large and growing market, this is a natural extension for their product.

(Also, Zelle doing a stablecoin is a stark contrast from the once innovative PayPal whose PayPal World product release integrated with UPI and WeChat and stopped there, never to be heard from again)

The giveaway that this is cold, hard rational business logic is launching in India first, and not using stablecoins. By value, the USA → India corridor is the second largest in the world, around $28bn a year, behind only USA → Mexico.

India is also one of the most stringent anti-crypto regimes in the world. 

The Reserve Bank of India (RBI) explicitly discourages private stablecoins. Under FEMA, the law that governs how money enters and leaves India, stablecoins aren't recognized as currency, so a stablecoin remittance isn't a legal forex inflow. Separately, the RBI treats private stablecoins as a financial-stability and capital-flight risk, and pushes its own digital rupee instead.

Banks don’t like breaking laws. 

Especially in markets where they operate at scale. So for India, launching with tighter local integration to banks and UPI makes sense. There are other markets where stablecoins are not only allowed but increasingly preferred by consumers.

Banks like stablecoins when they’re a rail that helps them with remittances.

There is another bank consortium, owned by the large banks that decided not to pursue stablecoins in favor of tokenized deposits, and their reason why tells you a lot about how banks view the risk/reward of tokenized money. 

In case you missed it, there’s another bank consortium that announced they’ll build a shared network connecting on-chain, blockchain-based payments with traditional fiat rails to clear and settle tokenized deposits. Not stablecoins.

The Clearing House (TCH) is owned and operated by many of the same large banks (JPMorgan Chase, Bank of America, Citi, and Wells Fargo et al) but is a separate company from Early Warning Services. It processes over $2 trillion daily across traditional and real-time networks, managing ACH, high-value wire transfers, and check clearing for major commercial banks. It helps make those payments more efficient with netting, so banks aren’t tying up deposits managing payments, and can put their balance sheet to work in lending, etc.

The benefit is to allow banks to offer instant 24/7/365 settlement, programmable money capabilities, and smart contract automations that currently digital assets and stablecoins offer. It will also ensure those tokenized deposits are backward compatible with ACH, CHIPS and other bank settlement systems. 

The focus is large B2B transfers.

But the true goal is defensive. Offer interoperability of deposits that move 24/7 like stablecoins. Why? To prevent deposits moving out of banks and into stablecoins for that 24/7 benefit. 

The logic is something like this:

I just have one nit with this. And it’s the same nit much of the industry has with EWS. That’s all well and good if you’re a bank, and you’re one of the primary backers of TCH. But as a smaller bank or a non-bank, it looks like another expensive bank-only network where they have no say, and little economic incentive. 

For large banks, doing large B2B transfers, TCH and tokenized deposits make sense and they should do it. 

But this alone won’t fend off stablecoins, because it's a fundamental misread of what makes stablecoins useful. 

Remember the rule: deposits want to rest, stablecoins want to move. Deposits are money that wants to stay still, to collect yield, NIM and fund balance sheets. TCH is trying to make resting money behave like moving money, because it’s a better business case for banks, but not always the best tool for the job.

But maybe the easier business case is cross-border.

Which made me wonder about another consortium, one dedicated to international payments, the Society for Worldwide Interbank Financial Telecommunication (SWIFT). Why didn’t they use Zelle for that and go the tokenized deposits route there too?

SWIFT is enormous. The SWIFT network facilitates approximately $5 trillion in financial transactions every day, moving around $150 trillion annually. It processes over 45 million messages per day, linking more than 11,500 institutions across over 200 countries. Each message is as fast as an email. 

It’s really big, and it moves all of the money. But it’s also expensive and slow. A transfer can cost anywhere from $40 to $100, and, depending on your corridor, can settle nearly instantly or take weeks. This isn’t necessarily the fault of SWIFT itself. Much of the perceived expense and slowness of SWIFT comes not from the network, but the banks themselves, and their local central banks. 

SWIFT messages are fast, they move like email, instantly. But SWIFT has over 11,500 member financial institutions, and they all have to gradually adopt new standards that are forged by committees. 

SWIFT, however, unlike its name would suggest, is not very fast at changing how it works. 

Switching on tokenized deposits would be a multi-year project, and several are underway to streamline digital asset and international payment settlement. One of which is the SWIFT ledger, designed to enable real-time, 24/7 cross-border settlement by acting as a shared digital orchestration layer for tokenized deposits, stablecoins, and CBDCs. 

This would fix the plumbing, meaning your value can move 24/7, anywhere in the world (well to any SWIFT member bank), just like stablecoins, but with the added benefit of being accepted everywhere. It sounds ideal; there’s just one snag.

The MVP exists, but going live could be 5 to 10 years away. 

As an alternative, in my day job at Tempo*, we’re working with SWIFT, ANZ, Standard Chartered and UBS on upgrading the SWIFT messages themselves to support stablecoins in the PAIN001 and PACS008 messages.

This has the advantage of working with the banks' existing risk and payments infrastructure. Meaning they don’t have any new integrations or processes to build. It means banks skip the correspondent banking network entirely. They send the same SWIFT message they already send, then settle the value with a stablecoin transfer instead of a Nostro account. Same message, same compliance checks, new settlement rail.

So if you’re Zelle, TCH is domestic only. SWIFT isn’t ready yet. But your own stablecoin works today. Which leads me to the point of today’s Rant.

We're in a curious time where banks and central banks think stablecoins are a threat they have to fight. The fear has a name: the CLARITY Act, which cleared Senate Banking 15-9 and would let stablecoin issuers pay rewards that banks worry compete with deposit rates (I don't think they do, but put that aside for a moment and imagine it did).

If Coinbase has paid 4%+ yield on USDC for three years, where was the deposit flight? It didn't show up. McKinsey says total bank deposits increased by 4% over 2024 and 2025. The customers who wanted yield already left. The ones who stayed, stayed for the bank.

So the war everyone's bracing for isn't really coming. I imagined three scenarios and weighted them based on the conversations I have every day with banks, regulators, the stablecoin industry, and most importantly, the businesses adopting them:

Co-existence wins, and it isn't close. The only question left is how, not whether.

Tokenized deposits will have a useful place, especially for large B2B where stability, security and reliability matter most. They rest. Stablecoins move. Two tools, two jobs.

But tokenized deposits have a ceiling. They're an instant, 24/7 option inside a bank-led network, and the limit is the network itself. There is no network of networks for money. No internet for money.

At least, there wasn't until we had stablecoins.

Stablecoins work anywhere with an internet connection and a compatible wallet. They're the rail above the rails. Stablecoins are how a Citi token, a JPMorgan token, a Zelle remittance and a SWIFT message all reach the same place.

They add the connectivity our traditional networks could never build for themselves.

The smart money already gets this. A GSIB team told me this week:

The CFO of a global corporate doesn't care whether it's a stablecoin or a tokenized deposit. They care that it solves their problem, moves money faster, and adds no risk. Lock yourself to one side of this, and you'll build for a war that never comes, on infrastructure that ages badly.

Stablecoins are here today. Tokenized deposits are here today. 

They're converging, creating new markets and new opportunities on public blockchains like Ethereum, Base, Solana, and Tempo.*

It turns out salad fits in a bowl. So does soup. The bowl is the new part. Pick whatever cutlery the job needs. It all reaches into the same bowl now.

ST.

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(1) All content and views expressed here are the authors' personal opinions and do not reflect the views of any of their employers or employees.

(2) All companies or assets mentioned by the author in which the author has a personal and/or financial interest are denoted with a *. None of the above constitutes investment advice, and you should seek independent advice before making any investment decisions.

(3) Any companies mentioned are top of mind and used for illustrative purposes only.

(4) A team of researchers has not rigorously fact-checked this. Please don't take it as gospel—strong opinions weakly held

(5) Citations may be missing, and I’ve done my best to cite, but I will always aim to update and correct the live version where possible. If I cited you and got the referencing wrong, please reach out