The promise of stablecoins has always been clear: a stable, digital, borderless form of money. Stablecoins bridge the reliability of fiat currencies with the efficiency of blockchain, and they are quickly becoming a foundational layer for global payments. As adoption increases, the key question shifts from if they will count for how they will shape global finance.
Will they unlock truly seamless cross-border payments? Or will they fragment into a mosaic of disconnected local systems?
The plan for global adoption: five key takeaways
Earlier this year, at Point Zero Forum organized by the Global Finance and Technology Network (GFTN)Policymakers and industry leaders from different jurisdictions came together for a series of public-private roundtable discussions on the future of stablecoins.
Ripple, with Global digital financeco-author of a report: The fungibility of Stablecoins: unlocking cross-border payments or fragmenting the global financial system? The report distills key shared perspectives and explores a crucial question: will stablecoins deliver on their promise of enabling seamless cross-border payments, or will they instead fragment into a patchwork of local systems?
Discussions with policymakers and industry leaders resulted in a strong consensus on the core priorities for building a functioning global stable ecosystem. The report’s five key points provide an essential blueprint for the strategic direction of the industry:
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Real use cases are already there: Stablecoins have moved beyond crypto speculation and are now solving real-world problems in areas such as cross-border business-to-business (B2B) payments, digital business payroll, and settlement in tokenized marketplaces, proving their utility in the traditional economy.
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Interoperability must be a first design principle: To avoid recreating the fragmented silos of the old financial system, interoperability across networks, issuers and jurisdictions must be a fundamental part of both technology and policy, ensuring smooth movement of value from the outset.
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Regulatory harmonization constitutes the main obstacle and opportunity: Inconsistent rules and definitions across jurisdictions are the biggest barrier to global adoption, creating “walled gardens” that limit fungibility. This challenge also constitutes the greatest opportunity for international cooperation to build a coherent framework.
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Stablecoins should be “boring”: Stablecoins should be reliable and predictable payment instruments, not speculative assets. This “boring” stability is a key element that builds the confidence necessary for integration into the financial infrastructure.
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Standards and definitions will delay overall usability: The lack of common legal classifications and technical standards creates friction and uncertainty. Adopting common compliance and messaging frameworks provides the essential foundation for a truly functional, global system.
Stablecoin Regulatory Challenges
While these takeaways provide strategic direction, the journey is not without significant obstacles. THE Report has identified regulatory harmonization as the biggest obstacle, and a prime example of this challenge is taking place at a global level.
However, there is growing concern that some proposed standards could have the opposite result. A coalition of global financial associations recently submitted a letter to the Basel Committee on Banking Supervision (BCBS) to consider a pause and recalibration of the Cryptoasset Exposure Standard (SCO60). The SCO60 is a set of minimum global capital requirements that banks should meet for their holdings of cryptoassets. These standards aim to provide a comprehensive and prudentially sound framework for banks engaging in these emerging asset classes and ultimately manage and mitigate financial system risks.
The associations argue that the current SCO60 standards could create a fragmented market by discouraging bank participation because capital requirements are too punitive and do not correspond to real risks. This could effectively push a growing and innovative sector to operate outside the regulated banking system, thereby undermining the goal of overall financial stability.
Among the coalition’s key recommendations was a call to “reconsider the treatment of regulated stablecoins.” The associations emphasized that the BCBS framework should distinguish between regulated and unregulated stablecoins, as they have fundamentally different risk profiles, which does not fit the principle of “same risk, same rules.”
When global standards treat all stablecoins using a one-size-fits-all approach, not only do they not accurately reflect risk, but they also inadvertently discourage very strict jurisdiction-level regulations that promote stability and trust. True harmonization must build bridges, not walls, between traditional and decentralized finance.
To develop coherent regulation, the entire financial ecosystem must be able to participate, integrating new technologies into established structures. This is an opportunity for global standards bodies to create risk-sensitive, technology-neutral and inclusive frameworks.
Interoperability as the missing piece
If regulatory alignment constitutes the strategic foundation, interoperability is the essential technical counterpart. A key theme of the report identified this as the deciding factor that will determine whether stablecoins create a transparent global system or a set of “walled gardens.”
Without interoperability, a dollar-backed stablecoin issued under the rules of one jurisdiction may not be easily exchangeable or usable in another, defeating its primary purpose. Through it, we can achieve true fungibility, where a well-regulated digital dollar is functionally equivalent and reliable everywhere, regardless of its point of origin. This requires a shared commitment to relying on common technical standards that allow different systems to communicate.
A moment of collaboration: learning by doing
As the industry develops a comprehensive framework for stablecoin adoption that supports innovation while protecting consumers, the landscape presents a common headache for regulators. On the one hand, regulators have a mandate to protect consumers and ensure financial stability, which often leads to localization requirements. On the other hand, businesses and users need value to cross borders smoothly, reliably and at low cost.
Build a sturdy structure stablecoin market requires enabling the circulation of a wide range of stablecoins, including those issued abroad. This variety expands choice for individuals, businesses and institutions and supports innovation in the broader 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 highlights that regulatory harmonization is both the biggest obstacle and the biggest opportunity. This can be explored by adopting a “learning by doing” approach for industry and regulators to build frameworks that preserve the global fungibility of stablecoins without undermining national priorities.
Ripple recently announced a signed a memorandum of understanding (MOU) with SBI Holdings to distribute RLUSD in Japan. This partnership could serve as an example of how to introduce a compliant, enterprise-grade stablecoin into a highly regulated market. More broadly, it is a concrete exploration of how a global asset can operate within a specific national framework, providing valuable lessons for achieving a balance between local compliance and international harmonization ambitions in the near future.
Towards fungibility
Stablecoins are at an inflection point. The path to becoming the connective tissue of a more inclusive and efficient global financial system depends on pragmatic convergence. This will be achieved by building on two pillars: risk-aware alignment from global standards bodies and an unwavering commitment to interoperability.
The impact of these digital assets will not be determined solely by issuers or regulators, but by how effectively all stakeholders collaborate. Fungibility is the destination and collaboration is the way forward.
Learn more about Ripple’s vision for innovation in global payments and public policy perspectives.
