Why Finance Leaders Embrace Tokenisation as Next-Gen Digital Money
The Evolution of Digital Money and the Role of Tokenised Deposits
The financial landscape is undergoing a significant transformation, driven by the emergence of tokenised deposits, stablecoins, and other digital money systems. These innovations are challenging traditional models and forcing banks, payment networks, and regulators to rethink liquidity, interoperability, and compliance frameworks.
At the Singapore FinTech Festival 2025, finance leaders discussed how they are reengineering financial infrastructure to manage risks while unlocking new efficiencies across borders and currencies. One key development is the launch of deposit tokens on public blockchains, which represent a fundamental shift in how bank money is represented and transferred.
Naveen Mallela, Global Co-head of Kinexys at J.P. Morgan, highlighted that this “decoupling of the ledger from the payment instrument” enables commercial bank money to exist on-chain while maintaining its deposit-backed security and regulatory clarity. By extending deposit-based products into tokenised form, banks can make liquidity available “in venues where it is required,” effectively inverting the traditional model where clients come to banks for access.
This evolution hints at a hybrid ecosystem where stablecoins, deposit tokens, and CBDCs (Central Bank Digital Currencies) coexist, each addressing different market needs. As Mallela noted, “We’re not going to see a mass replacement of all RTGS systems anytime soon… There will be extended coexistence.”
Interoperability: The Next Frontier
For Mishal Ruparel, Chief Commercial Officer at Banking Circle, the next phase of digital money is about interoperability — the ability to move value instantly across networks and borders. Clients increasingly ask how digital assets like stablecoins and tokenised deposits can “provide real-time payments in an instant, 24/7, with absolute clarity.”
Cuy Sheffield, Visa’s Head of Crypto, emphasized that the conversation is no longer about speculative crypto but about infrastructure. Visa’s experiment with USDC (USD Coin) as a settlement currency aims to solve the bottleneck of moving money behind the scenes as fast as authorising payments. This experiment has scaled quickly, and Visa now accepts stablecoins on multiple blockchains, including Ethereum and Solana.
Salim Dhanani, CEO of Pave Bank, argued that modern financial institutions must be rebuilt from the ground up for programmable finance. Pave Bank’s new core banking stack is designed for “programmable compliance,” where smart contracts can automate risk and policy enforcement. If money is on-chain, it’s traceable, allowing institutions to monitor transactions at every stage.
Programmability and AI Integration
Looking ahead, the panellists agreed that programmability and AI integration will define digital money’s next frontier. Key discussions revolved around how these technologies can streamline cross-border payments and reduce friction in exception processing.
Mallela stressed the importance of interoperability, noting that it’s not just between newer forms of money or platforms, but also between current and new systems. He believes that the winners in this new era will be those who can bridge all these systems seamlessly.
Programmable compliance was another critical topic. Mallela explained that the friction in cross-border payments often stems from multiple banks performing the same compliance checks repeatedly. To address this, he advocated for portable proofs of compliance checks and policy wrappers that can be wrapped around tokens.
From a user perspective, Mallela argued that deposits are actually the superior form of money. They offer certainty, legal backing, interest, and safety, making them an attractive option in the evolving digital money landscape.
Conclusion
As the financial industry continues to evolve, the integration of tokenised deposits, stablecoins, and other digital assets is reshaping how money is managed and transferred. With a focus on interoperability, programmability, and compliance, institutions are paving the way for a more efficient and transparent financial ecosystem. The future of digital money lies in its ability to adapt and integrate with existing systems, ensuring seamless transitions and enhanced user experiences.
