How On-Chain Banking Is Changing Modern Finance

For decades, the global financial system has enabled businesses to trade across borders by prioritizing stability and regulatory oversight. Yet despite the fact that transactions are increasingly digital and global, the speed of settlement remains unchanged.

The way value moves across borders today reflects deep structural problems. International wire transfers operate within small windows, and payments often go through multiple intermediaries before reaching final settlement. This structure was built for the era of paper ledgers and limited communication. Today, it slows down businesses. While digital transactions promise speed, the pipelines are still stuck in the past, stuck in banking hours, correspondent relationships and geographic boundaries.

Being disconnected is no longer just boring; it is systemic risk for banks and financial institutions. In the world’s first digital economy, payments cannot depend on legacy policies. The most efficient way forward is to move bank accounts and their core payment functions to public blockchains.

Stablecoins have revealed a gap

The evidence is already visible in the way people and businesses move dollars today. Data from Artemis Analytics, reported by Bloomberg, shows that stablecoins settled at approx $33 trillion in sales in 2025. Even if automated trading and laundry work are excluded, the Transak report estimates $9 trillion in real economic transactionsa figure nearly five times the annual volume processed by global platforms such as PayPal, which handled around 1.8 billion in the past 12 months. The volume of transactions itself serves as evidence that people act, not just believe. When users can move a dollar amount across borders in seconds, anytime, they do.

Stablecoins have gained traction because they are dealing with some of the failures of legacy rails. Payment today depends on banked windows and communication networks that were not designed for continuous international trade.

Tether’s USDT and Circle’s USDC are now at the heart of that performance. CoinGecko data USDT estimated at $186 billion in circulation and USDC around 70 billion dollars. According to Artemis, however, the USDC has considered a large share of the transaction volume by 2025. The difference lies in their different use cases: USDT dominates simple transfers and daily payments, while USDC is mainly used for trading, treasury operations and institutional flows.

This trend extends beyond cryptocurrency markets. Stablecoins are already serving as a useful substitute for dollars in countries facing inflation or capital controls, and are increasingly serving as a payment base for corporate payments in advanced economies. The old system no longer satisfies the basic requirements, and market behavior is adjusted accordingly.

Regulators and institutions are also paying attention. In the US, the passage of the GENIUS Act moved payment coins from the regulatory gray area to a recognized financial infrastructure, establishing government standards for deposits and issuance. In Europe, the Markets in Crypto-Assets Regulation (MiCA) has done the same, creating a unified framework for all EU member states. These steps show that on-chain settlement is being made legal in the global financial system.

As a result, institutions including Standard Chartered, Walmart and Amazon are now present investigating stablecoin issuance or combining. This is not a shop test. It is a response to a demonstrated need and regulatory specification.

On-chain accounts as a missing layer

These changes are not lost on traditional banks either. The Bank of America report from December 2025 revealed a multi-year movement to on-chain settlementcites pilots at JPMorgan and DBS that include token deposits. Meanwhile, the Office of Financial Regulation has granted charter bank trusts with conditions to select digital asset firms, while the FDIC and Federal Reserve are improving monetary and liquidity regulations for stablecoin activity under the GENIUS framework.

Most banking efforts, however, are still focused on internal or closed networks. Token deposits can move faster than ACH or wire transfers, but they are still account-based loans that rely on interbank reserve funds. Even JPMorgan’s JPMD model, which put deposit tokens on the public blockchain, it works very effectively where both banking groups and JPMorgan.

At the same time, crypto-native platforms are going in the opposite direction, incorporating traditional banking functions directly into the infrastructure of digital assets. Bybit’s new “MyBank” service, for example, allows users to hold and move fiat with IBANs while seamlessly converting money to crypto. This transformation, crypto-centric banking instead of crypto-based banking, shows where user demand is headed.

Although independent stablecoins solve the problems of speed and availability, they remain outside the usual frameworks of consumer protection, compliance and deposit guarantees. On-chain bank accounts provide a convergence point: controlled oversight combined with blockchain-native settlement. Account identifiers, balances and transaction logic can live directly on the thread. In that structure, stablecoins act as currency within the banking system rather than alongside it. Payments are continuous, reconciliation is automatic and wealth visibility is imminent. The days of waiting for guarantees expire.

Market data suggests this is far from niche. Bloomberg Intelligence projects stablecoin payment flow is possible reach $56 trillion by 2030based on current usage trends. An EY-Parthenon study found that more than half of non-user institutions plan to use stablecoins within a year. The demand signal is infallible.

Banks are vulnerable to discretion

Currently, banks still benefit from deep credit relationships, interest-bearing accounts and deposit insurance. Proponents argue that once tokenized interbank deposit networks reach maturity, they will meet market needs. But that view underestimates the payment bottleneck. As long as payments require back-up movement at each hop, delays are inevitable. Stablecoins bypass that limitation entirely. If rails fail to meet user expectations, the benefits of traditional infrastructure are eroded.

This concern is legitimate, even the International Monetary Fund recently warned that the adoption of a large stablecoin affected banking operations and the transmission of monetary policyurges regulators to monitor risks in its latest 2025 ministerial paper.

However, cautiously maintaining slow lanes is not a solution. The goal is integration: to bring on-chain accounts to regulated banks that are regulated by capital, liquidity and compliance standards. This keeps the work within the supervised institutions rather than moving it to similar programs.

Payments for internet speed

International trade already operates outside normal business hours. Payments are due too. Stablecoins have shown that continuous, scalable payments are achievable. Deposit tokens show how banks can adapt to existing products on blockchain networks. On-chain bank accounts connect those wires to a system designed for real users, not just test systems.

The debate on whether blockchains belong in payments is effectively resolved – by transaction volumes, institutional pilots and regulatory frameworks. What remains unknown is architecture.

Bank accounts are moving to open layers, or users will continue to navigate legacy systems. In a digital-first economy, there is little tolerance for anything slow.