Emails travel the world in mere milliseconds, but money still moves slowly. Payments, particularly international ones, can take days—longer during weekends and holidays. This leads to trillions of dollars being stuck where they cannot generate yield.
This inefficiency is more than just a nuisance; it’s a systemic issue. For businesses and financial institutions, slow access to liquidity results in increased costs, limited working capital, and a fundamental disadvantage in a world that demands real-time responses.
Stablecoins as the catalyst
The emergence of stablecoins demonstrated that money could move at internet speed. Nowadays, trillions of dollars’ worth of transactions are settled instantly on blockchain networks, with stablecoins offering the dollar liquidity necessary to fuel crypto markets, payments, and remittances. However, stablecoins only address part of the issue.
Source: https://visaonchainanalytics.com/
They offer speed, but not yield. Aggregate stablecoin balances amount to hundreds of billions of dollars, and generally earn no interest. In contrast, tokenized treasury assets and money market funds are low-risk, yield-generating instruments that provide the risk-free rate. The issue lies in the fact that transactions into and out of these products often operate on asynchronous, frequently T+2 timelines, restricting access to investable capital for immediate use.
Convergence and composability
The industry is on the verge of convergence. Major asset managers now provide tokenized money market funds, with BlackRock’s BUIDL, for instance, surpassing $2 billion in assets under management.
Source: https://app.rwa.xyz/assets/BUIDL
These tokenized funds can transfer and settle instantly, including atomically, with other tokenized instruments like stablecoins. As stablecoin usage grows, so do the cash and treasury management requirements for which tokenized treasuries offer the best solution.
What remains is the necessary infrastructure. Without a neutral system to facilitate atomic, round-the-clock swaps between stablecoins and tokenized treasuries, we merely digitize existing limitations. The real breakthrough occurs when institutions can hold risk-free assets and instantly convert them to cash at any time, without intermediaries, delays, or price slippage.
The stakes
The implications are significant. In the U.S. alone, non-interest-bearing bank deposits amount to nearly $4.0 trillion. Even a small portion diverted to tokenized treasuries that could be quickly converted to stablecoins would unleash hundreds of billions of dollars in yield while maintaining full liquidity. This is not just a slight enhancement; it represents a fundamental shift in global finance.
Crucially, this future necessitates open, neutral, and compliant infrastructure. Proprietary systems may yield efficiency for individual organizations, but systemic advantages arise only when incentives align among issuers, asset managers, custodians, and investors. Just as global payment networks required interoperable standards, tokenized markets need shared frameworks for liquidity.
The path forward
The liquidity gap is not an unavoidable outcome. The necessary tools are available: tokenized risk-free assets, programmable money, and smart contracts that enforce trustless, immediate settlement. What is required now is urgency—from institutions, technologists, and policymakers—to close the divide.
The future of finance goes beyond merely faster payments. It envisions a world where capital is perpetually active, where the compromise between liquidity and yield vanishes, and where financial market infrastructures are rebuilt for a continuously operating, global economy.
This future is nearer than many perceive. Those who adopt it will shape the forthcoming era of financial markets; those who delay will be left behind.
