What's new in the world of Stablecoins

Stablecoins have dominated financial headlines in recent weeks, with long-awaited developments now becoming a reality:

European Banks Plan Euro Stablecoin

Nine major banks, including ING, UniCredit, Danske, and SEB, are forming a joint venture in Amsterdam to launch a euro-denominated stablecoin. They plan to launch in the second half of 2026. The stablecoin aims to enable fast, low-cost payments, especially cross-border.[Source 1]

UK regulation speeds up: The FCA raised crypto firm approvals from under 15% to about 45% and cut approval times from 17 to 5 months. The regulator faces pressure to issue clear, coherent stablecoin rules. [Source 2 ]

US regulatory

With the approval of the Genius Act, stablecoins in the US are now regulated and easy to issue [Source 3 ]

Private Sector Innovation
Companies like Tether (issuer of USDT) and Circle (issuer of USDC) are exploring further applications for their stablecoins, from fraud and dispute resolution to AI-powered services.

What is a Stablecoin and why does backing matter?

Stablecoins are digital payment instruments designed to maintain a stable value by being pegged to an underlying asset. This peg is achieved by backing the token 1:1 with real-world reserves. The choice of backing asset is critical, as it directly affects both liquidity and the level of risk posed to the wider financial system. Let’s see some examples [Source 4]:

• Bond-backed Stablecoins: Reserves invested in short-term government securities. Low risk, but profitability depends on interest rates. Can impact liquidity in bond markets, and prolonged low/zero rates reduce viability.
• Bank-backed Stablecoins: Backed by commercial bank deposits. Medium risk if deposits are not diversified; less fluid liquidity due to time needed to unlock value.
• Crypto-backed Stablecoins: Collateralised by volatile crypto assets. High risk due to underlying asset volatility.

Since the earliest days of money, trust in the payment system has depended on a clear connection between the instrument and its underlying value. Gold and silver coins held intrinsic worth; paper notes were initially backed by precious reserves [Source 5]. History reminds us what happens when that link is broken: overspending, devaluation, and even revolution [Source 6]. Stablecoins attempt to restore this confidence while enabling fast, borderless payments unconstrained by national boundaries.

Why Stablecoins and Why Now?

Financial institutions (FIs) are increasingly open to stablecoins because they combine safety, efficiency, and economics:

• Low risk: Reserves are locked or invested in highly liquid short-term assets. This makes them less risky than many other bank liabilities.
• Payment control: Stablecoins allow FIs to issue digital money without relying on third-party processors.
• Revenue opportunities: Institutions can earn yield on reserves plus incremental fees on stablecoin-based payments.
• Regulatory clarity: Frameworks like MiCA in the EU and upcoming UK rules are bringing certainty to issuers.
• Market pressure: Corporate clients and customers increasingly demand cheaper, faster cross-border payment rails.
• Economic incentives: With current interest rates, reserve-backed models are highly profitable.

In the latest report shared by Citi, the stabelcoin forecast: by 2030, stablecoin issuance could reach $1.9 trillion (base case) or up to $4 trillion (bull case), supporting $100–200 trillion in transaction volumes annually [Source 7 ].

How the Stablecoin process works and how Rayls helps

The issuance of stablecoins starts with liquidity reserve. The FI sets aside reserves of fiat liquidity, invested in short-term safe assets. The percentage of this “safety net” depends on the regulatory requirements. To distribute the stablecoins, the FI  mints on demand, when a customer buys with FIAT for the stablecoins, the fiat is locked in reserve, and the stablecoin is minted 1:1 and delivered.

Each request will increase the reserve pool, which generates yield growth. In addition, every payment using stablecoins will generate a micro-fee providing recurring revenues for the FI.

Hybrid Trust Model — Privacy and Transparency

Rayls introduces a dual-layer architecture in which reserves are managed securely on the private, permissioned network, while stablecoins are minted and transacted on the public chain.

This allows banks to maintain confidentiality around reserve management and invest in tokenised short-term assets, while regulators and customers gain verifiable proof of 1:1 backing through zero-knowledge proofs and independent audits.

On the public side, every stablecoin movement is traceable, fees are collected automatically, and payments remain fast and transparent. This hybrid model balances what traditional finance requires — privacy, compliance, and control — with what digital assets deliver — openness, liquidity, and trust.

Rayls Privacy Nodes enable financial institutions to lock and invest reserves privately while still demonstrating backing for regulatory purposes. They also allow banks to manage both customer accounts and tokenised assets on the Rayls Private Network, while using the Rayls Public Chain for stablecoins distribution. Minting on the Public Chain ensures transparency, transaction tracking, and seamless fee collection, while zero-knowledge proofs provide assurance of reserves without disclosing sensitive information.

This combination of private reserve management and public-chain transparency creates a trusted, efficient, and revenue-generating ecosystem for banks and financial institutions. It supports both bond-backed and bank-backed stablecoins, safeguarding asset values while ensuring transparency.

With Enygma, Rayls’ quantum-secure private protocol, institutions can issue safe, interest-bearing products to manage liabilities. It also allows to share between several FIs the reserve of the stablecoins, because it allows private transactions between FIs, including potential interoperability with CBDCs.

With the Minting of the Stablecoins on the Public Chain which enable efficient cross-border payments, generate new digital revenue streams, and position themselves strategically within tokenised finance.

Citi’s recent analysis further strengthens the case: tokenised deposits (bank tokens) could surpass stablecoins in scale, potentially handling $100–140 trillion in annual flows by 2030. This underscores the dual-track opportunity: stablecoins as borderless liquidity, and tokenised deposits as instruments of institutional trust. Rayls provides the infrastructure to support both within a secure, privacy-preserving framework.

Conclusion

Stablecoins are emerging as one of the most important financial innovations of the decade.

For banks, they represent both a defensive hedge against disintermediation and an offensive opportunity to generate yield, fees, and digital relevance. With Citi forecasting trillions in issuance and the parallel rise of tokenised deposits, the opportunity is clear.

With Rayls, financial institutions can issue stablecoins under their own control, balancing privacy with transparency and profitability with compliance.

Take control of the future of finance - with Rayls.

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