Stablecoins, central bank digital currencies (CBDCs) and tokenised deposits are moving from experimentation to practical use, raising questions about how money and payments may evolve. The dynamics were discussed in a panel at The Asian Banker Summit 2026, featuring executives from ZA Bank, Circle, J.P. Morgan and Wavpay.

Jurisdictions are enabling different forms based on market demand and use cases. James Chan, Head of Transaction Banking and Controls at ZA Bank noted the progress enabled by the Hong Kong Monetary Authority to date. "We now have a very comprehensive framework in Hong Kong for stablecoins, alongside initiatives in CBDC like Project Ensemble and tokenised deposit experiments."

Meanwhile, Malaysia's central bank has set up a Digital Asset Innovation Hub to test ringgit stablecoins and tokenised deposits in a controlled environment, with plans to provide policy clarity by end-2026. Wong Tze Yow, Board Member of Malaysian fintech Wavpay, said, "You have to be involved in digital money, but there is still work to do from a risk management perspective."

Heng Wang, Professor of Law, Singapore Management University, echoed the importance of safeguards. "Given the complexity, there is a need for increased governance and risk management. However, if managed properly, digital money can meet different needs," he said.

Where stablecoins are actually being used beyond crypto trading

While the interest around stablecoins has grown, some question their use. Chengyi Ong, Director, APAC Policy and Regulatory Strategy at Circle, explained, "We are out of the experimentation phase but still at a relatively early stage in seeing stablecoins in real world use cases outside of crypto trading."

According to Ong, stablecoins have potential to be used in cross-border payments for treasury management and liquidity optimisation. Another use case is the "stablecoin sandwich" for cross-border settlements, where fiat is used at the ends and stablecoins facilitate the middle leg for faster settlement.

She sees both dollar and local currency stablecoins co-existing as they solve different problems. Local currency stablecoins address the residual frictions in domestic payments and can be used for settlement in local currency-denominated tokenised financial markets. Another use case is on-chain FX solutions where the local currency is involved.

According to Wee Kee Toh, Global Head of Insights, Kinexys by J.P. Morgan, "In an ideal world, a global stablecoin would simplify payments. However, regulations in most economies have restrictions against foreign issued stablecoins as there is limited ability to influence if stablecoin reserves are not held in your country."

Accordingly, many governments are enabling frameworks that allow for local currency stablecoins. The question is whether global stablecoin leaders will venture into local stablecoins.

Ong explains issuers need access to local banking rails and must provide enough liquidity, which only players ingrained into local ecosystems can do. "It is not lost on us that 98% of the stablecoins are dollar denominated, but only 50% of cross-border payments are dollar denominated. There is space for a lot more local currency stablecoins to emerge," she said.

How banks are using programmable payments and blockchain treasury tools

Banks are increasingly seeing clients using blockchain-based payments. The drivers are twofold, real-time 24x7 payments and programmability. Toh explains that the "follow the sun" model of treasury management is becoming obsolete as companies can now draw funds from US accounts in real-time, even when US banks are closed.

Programmable payments are another use case for blockchain-based payments. This started with automating simple tasks and now supports complex criteria. Programmability allows for complex "waterfall" approaches to account funding, based on relative balances or specific FX rate triggers.

Advanced use cases involve business smart contracts interacting directly with payment smart contracts to pay automatically once specific delivery criteria are met.

Why trust, AML and interoperability gaps remain barriers to adoption

There remain hurdles to adoption including regulatory fragmentation, operational frictions, trust deficit and lack of interoperability. Chan highlights the operational friction faced when onboarding Web3 companies. The end-to-end information flow is lost as the source of funds appears as the licensed trading platform, thereby creating challenges around anti-money laundering (AML).

Wang sees lack of trust as a key challenge. “Digital currency is about the trust users have in the digital currency but also in the institutions behind it,” he said. Establishing market confidence is key to wider adoption and to achieving network effects.

With digital money operating within closed ecosystems across different blockchains, interoperability remains another key barrier to adoption. Toh sees solutions, but flags high compliance costs. "Ultimately, we should be using common blockchains or maybe a few of them. By virtue of us having issued tokens on public blockchain, we can get regulators comfortable, but the cost of compliance is really very high," he said.

What's next for CBDCs, stablecoins and tokenised deposits

For Wong, digital money is a natural evolution of finance. Wang believes in the growth of tokenised forms of money, but highlights the need to be adaptive and build trust with customers and regulators. Chan predicts that the distinction between different types of digital money will eventually fade.

The next few years will be an inflection point for digital forms of money, marked by a proliferation of products before the market settles on dominant standards. The winners will be the banks which dip their feet in the water and regularly adjust their proposition, even if the water temperature does not feel perfect yet.