The promise of stablecoins has always been clear: a form of money that is stable, digital, and borderless. Stablecoins bridge the reliability of fiat currencies with the efficiency of blockchain, and they are rapidly becoming a foundational layer for global payments. As adoption grows, the key question shifts from if they will matter to how they will shape global finance.
Will they unlock truly seamless cross-border payments? Or will they fragment into a patchwork of disconnected local systems?
The Blueprint for Global Adoption: Five Key Takeaways
Earlier this year, at the Point Zero Forum organised by the Global Finance & Technology Network (GFTN), policymakers and industry leaders from different jurisdictions convened for a series of public-private roundtable discussions on the future of stablecoins.
Ripple, together with Global Digital Finance, co-authored a report: The Fungibility of Stablecoins: Unlocking Cross-Border Payments or Fragmenting the Global Financial System? The report distilled the key perspectives shared and explored a critical question: Will stablecoins fulfill their promise to enable seamless cross-border payments, or will they instead fragment into a patchwork of local systems?
The discussions with policymakers and industry leaders produced a strong consensus on the core priorities for building a functional global stablecoin ecosystem. The report's five key takeaways are a vital blueprint for the industry's strategic direction:
Real-world use cases are already here: Stablecoins have moved beyond crypto speculation and are now solving tangible problems in areas like Business-to-Business (B2B) cross-border payments, payroll for digital businesses, and settlement in tokenized markets, proving their utility in the traditional economy.
Interoperability must be a first principle of design: To avoid recreating the fragmented silos of the legacy financial system, interoperability across networks, issuers, and jurisdictions must be a foundational element of both technology and policy, ensuring seamless value movement from the outset.
Regulatory harmonization is the biggest barrier and opportunity: Inconsistent rules and definitions across jurisdictions are the primary obstacle to global adoption, creating "walled gardens" that limit fungibility. This challenge also presents the greatest opportunity for international cooperation to build a cohesive framework.
Stablecoins should be “boring”: Stablecoins should be reliable and predictable payment instruments, not speculative assets. This "boring" stability is a key feature that builds the trust necessary to integrate into financial infrastructure.
Standards and definitions will delay global usability: A lack of shared legal classifications and technical standards creates friction and uncertainty. Adopting common frameworks for compliance and messaging is the critical groundwork for a truly functional and global system.
Stablecoin Regulatory Challenges
While these takeaways provide a strategic direction, the journey is not without significant obstacles. The Report has identified regulatory harmonization as the biggest barrier, and a prime example of this challenge is unfolding at the global level.
However, there is a growing concern that some proposed standards may achieve the opposite. A coalition of global financial associations has recently submitted a letter to the Basel Committee on Banking Supervision (BCBS) to consider a pause and recalibration of the Cryptoasset Exposures Standard (SCO60). The SCO60 is a set of proposed global minimum capital requirements that banks would need to hold against their holdings of cryptoassets. These standards aim to provide a global, prudentially sound framework for banks engaging with these emerging asset classes, and ultimately manage and mitigate risks in the financial system.
The associations argue that the current standards in SCO60 could create a fragmented market by discouraging bank participation, as the capital requirements are overly punitive and don't align with actual risks. This could effectively push a growing and innovative sector to operate outside the regulated banking system, undermining the goal of comprehensive financial stability.
Among the coalition’s key recommendations was a call to "reconsider treatment of regulated stablecoins." The associations highlighted that the BCBS framework should differentiate between regulated and unregulated stablecoins, as they have fundamentally different risk profiles, which does not align with the "same risk, same rules" principle.
When global standards treat all stablecoins using a one-size-fits-all approach, they not only fail to accurately reflect risk but also inadvertently disincentivize the very robust, jurisdiction-level regulations that foster stability and trust. True harmonization must build bridges, not walls, between traditional and decentralized finance.
To develop cohesive regulation, the entire financial ecosystem must be able to participate, integrating new technologies into established structures. This is an opportunity for global standard-setting bodies to create frameworks that are risk-sensitive, technology-neutral, and inclusive.
Interoperability as the Missing Piece
If regulatory alignment is the strategic foundation, interoperability is its essential technical counterpart. A key theme in the Report has identified this as the decisive factor that will determine whether stablecoins create a seamless global system or a collection of "walled gardens."
Without interoperability, a dollar-backed stablecoin issued under one jurisdiction’s rules may not be easily exchangeable or usable in another, defeating its core purpose. With it, we can achieve true fungibility, where a well-regulated digital dollar is functionally equivalent and trusted everywhere, regardless of its point of origin. This requires a shared commitment to building on common technical standards that allow different systems to communicate.
A Moment for Collaboration: Learning by Doing
As the industry builds out a comprehensive framework for stablecoin adoption that supports innovation while protecting consumers, the landscape presents a shared puzzle for regulators. On one hand, regulators have a mandate to protect consumers and ensure financial stability, often leading to localization requirements. On the other hand, businesses and users need value to move seamlessly across borders, reliably, and at low cost.
Building a robust stablecoin market requires allowing a broad mix of stablecoins to circulate, including those issued overseas. This variety expands the choice for individuals, businesses, and institutions, and supports innovation in the wider ecosystem, particularly in jurisdictions that aspire to establish themselves as hubs for digital assets and asset tokenization.
However, this is a long-term challenge that requires collaboration and learning, not an intractable conflict. The Report highlighted that regulatory harmonization is both the biggest barrier and the greatest opportunity. This can be explored by adopting a "learning by doing" approach for the industry and regulators in order to build frameworks that preserve the global fungibility of stablecoins without undermining national priorities.
Ripple has recently announced a signed Memorandum of Understanding (MOU) with SBI Holdings to distribute RLUSD in Japan. This partnership could serve as an example of how to bring an enterprise-grade, compliant stablecoin into a highly regulated market. More broadly, it is a real-world exploration of how a global asset can operate within a specific national framework, providing valuable lessons for achieving a balance between local compliance and ambitions for international harmonization in the near future.
Moving Toward Fungibility
Stablecoins are at an inflection point. The path to becoming the connective tissue of a more inclusive and efficient global financial system is dependent on pragmatic convergence. This will be achieved by building on two pillars: risk-sensitive alignment from global standard-setters and unwavering commitment to interoperability.
The impact of these digital assets will not be decided by issuers or regulators alone, but by how effectively all stakeholders work together. Fungibility is the destination, and collaboration is the path forward.
Learn more about Ripple’s vision for global payments innovation and public policy perspectives.
