The infrastructure of banking is evolving beyond the narrative of a singular ‘stablecoin winner’: Sygnum. The digital asset bank Sygnum indicates that institutional clients are seeking various tokenized cash instruments that can operate interchangeably on one platform.

— Financial institutions and major clients are advocating for a cohesive framework where stablecoins, tokenized deposits, and tokenized money market funds can function interchangeably within a unified regulatory environment.

— Sygnum, alongside prominent banks like UBS and PostFinance, is experimenting with public yet permissioned blockchain models, asserting that these models effectively balance access to on-chain finance with necessary regulatory oversight.

— The initiative led by banks to create multi-asset tokenized money networks in Europe contrasts with policymakers’ inclination towards central-bank-led solutions, highlighting the limited acceptance of euro stablecoins that lack substantial bank support and integration into traditional finance.

Banks are concentrating on merging stablecoins and tokenized versions of conventional financial instruments into a comprehensive package to cater to the increasing institutional demand for multi-asset adaptability. Instead of waiting for a singular winner to emerge, large asset managers and corporate treasuries are calling for a multi-instrument arrangement where stablecoins, tokenized bank deposits, and tokenized money market funds all operate on the same infrastructure.

«The demand from institutional clients remains clear: they are not waiting for a single instrument to dominate,» Thomas Eichenberger, chief strategy officer and deputy group CEO at Sygnum, stated in an email to Decryptnews on Thursday. «They are inquiring about how tokenized deposits, regulated stablecoins, and tokenized money market funds can be integrated and made interoperable, allowing treasury functions to transition among them — with permissioned settlement, 24/7 cross-border flows, and yield with on-demand liquidity — all under a regulatory framework they trust.»

Sygnum, which claims to be the world’s first digital assets bank, partnered late last year with Swiss banking giant UBS and PostFinance, a subsidiary of the state-owned Swiss Post, to pilot blockchain payments between institutions on the Ethereum network.

The strong initiative from banks directly contests the viewpoints of European politicians regarding who should dictate the future of digital money. European Central Bank President Christine Lagarde recently maintained that euro stablecoins will not resolve the underlying issues in Europe’s financial markets, which primarily require more cash availability and a genuinely safe, trustworthy asset.

While Sygnum’s multi-instrument strategy aligns with Lagarde’s argument that stablecoins are not a panacea, it challenges her conclusion on the solution to the problem. Instead of waiting for central banks to introduce a digital euro, commercial entities are creating solutions independently.

Eichenberger concurred that stablecoins alone cannot bridge the existing gap. He noted that euro-pegged stablecoins have historically struggled to gain traction due to accessibility issues, insufficient bank backing, and a lack of integration with the broader financial ecosystem.

Beyond the assets themselves, a distinct technical discussion is underway concerning the infrastructure managing these transactions. «Most institutional discussions still revert to private chains for data confidentiality and counterparty management,» Eichenberger remarked. «However, the practical perspective from operators is that public yet permissioned models — public infrastructure with regulated access control — are where convergence is progressing. This approach facilitates connectivity to the wider on-chain financial system without compromising regulatory oversight.»

This combination of open access and stringent tracking is already being realized in practice. This year, Sygnum collaborated with UBS, PostFinance, Raiffeisen, Zürcher Kantonalbank, BCV, and Swiss Stablecoin to initiate a joint program testing a Swiss franc-backed (CHF) stablecoin.

For others in the industry, the Swiss trial exemplifies what bank-operated token networks resemble when the entities creating them, the cash that supports them, and the regulatory bodies overseeing them are all situated within the same country.

Tokenized assets reached a record high of $28.9 billion in May, marking their tenth consecutive monthly peak. The stablecoin market capitalization also expanded to $320 billion.