SEOUL, February 06 (AJP) - Global financial institutions are increasingly viewing stablecoins and tokenized deposits as essential infrastructure rather than speculative assets, according to Xin Yan, co-founder and chief executive officer of Sign, a blockchain technology company.
This shift is driven by the demand for programmable money that can function natively on-chain. Unlike traditional fiat currency, which relies on fragmented legacy systems, on-chain assets allow for direct settlement, payments, and collateralization without the need for manual intervention.
Earlier concerns regarding the technical resilience of blockchain networks have largely subsided. The infrastructure supporting stablecoins has been tested through multiple market cycles and real-world applications. The primary challenges remaining are legal and regulatory, as many jurisdictions have yet to establish frameworks that recognize digital representations of sovereign currency.
Xin Yan expects 2026 to bring significant regulatory clarification, moving the industry from debating the existence of these assets to integrating them into the formal monetary system.
To scale these systems, financial institutions must bridge the gap between asset settlement speed and compliance verification. While blockchain transactions occur in seconds, identity and compliance checks often still rely on manual processes.
The immediate priority for governments and institutions is the transition of identity and entity proofs into digital, verifiable credentials. This digitization allows records to be accessed and verified on-chain instantly, matching the speed of the underlying assets.
The long-term role of these technologies is the comprehensive digitization of the global financial system. Whether through stablecoins, tokenized deposits, or central bank digital currencies, the objective is to remove friction from capital movement.
Xin Yan notes that successful implementation will likely be invisible to the general public. Instead of focusing on the underlying blockchain technology, users will experience faster business operations and instant money movement. This efficiency is intended to increase the turnover of capital and improve the fluidity of global trade.
Trust remains a central factor in the adoption of on-chain systems. For large banks, enterprise blockchain networks offer a more transparent and easier-to-track environment than legacy ledgers. These systems allow for layered data access, ensuring that information is shared only with authorized parties.
By moving information flow onto a blockchain, banks can reduce maintenance costs and eliminate the need for large teams to reconcile different ledgers. The automated and transparent nature of these records also makes fraudulent activity more difficult to execute, potentially strengthening the existing trust advantage held by traditional financial institutions.
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