Australian banks are experimenting with stablecoin-powered deals to speed up settlements and cut costs, but the same technology that promises quicker, cheaper markets also threatens to pull deposits away from bank balance sheets.
Right now, stablecoins are moving from niche crypto tools to mainstream payment rails, with their global value more than doubling in two years to around $US315 billion and forecasts suggesting they could reach about $US3 trillion by 2030 if growth continues. As large fintech platforms weave US dollar stablecoins into everyday payments and card networks plug them into global settlement systems, traditional banks and super funds are starting to test how this digital money fits into their own operations rather than ignoring it.
In Australia, regulators granted licences to the first Australian dollar stablecoins late last year and those tokens are already being put to work in trial capital-market transactions under Project Acacia, a joint initiative between the central bank and a digital finance research centre. In one pilot, an ASX-listed payments provider issued an Australian dollar stablecoin that was used to buy a debt instrument from a regional bank. Ownership then moved through a digital marketplace where a major asset manager bought the asset from a large super fund, which then used the same stablecoin to purchase a tokenised term deposit created by two of the country’s biggest banks. The whole chain settled in minutes instead of the usual day-long process, thanks to “atomic settlement” on blockchain where the cash leg and asset leg of a deal are swapped at the same time, removing settlement risk.
Those tests have gone further, with tokenised corporate bonds also issued and traded using an Australian dollar stablecoin from a specialist issuer backed by a crypto investment group, again settling near-instantly between an investment bank and a digital asset manager. The message from these pilots is that tokenisation and stablecoins look ready to streamline wholesale financial markets, but they also highlight a looming question about what happens when similar tokens sit in retail digital wallets and offer fast movement of value outside the traditional bank deposit system. International experience is already raising alarms, with analysts comparing the potential shift of money into stablecoins to the way funds flowed into money market vehicles in the 1980s and some large US banks warning that yield-bearing stablecoins could eventually drain trillions of dollars from commercial bank deposits.
Globally, regulators in regions such as Europe, Hong Kong, Singapore and the US are trying to contain that risk by stopping stablecoin issuers from paying formal interest, but new US rules under a federal stablecoin framework backed by the current administration may still allow “rewards” that resemble yield and could tempt depositors away. Australian policymakers are moving in parallel, with Treasury designing a digital-asset law that is expected to hand responsibility for supervising stablecoin issuers to the main prudential regulator, aiming to protect consumers and avoid destabilising bank funding. Analysts at major brokerages and consultancies say the direction of travel looks clear and that stablecoins seem set to put pressure on bank funding costs and payment fee revenue while also opening fresh income streams from blockchain-based settlement, foreign exchange and conversion services for those banks that adapt early. In their view a well-structured stablecoin backed by diversified sovereign bonds may even prove more resilient than today’s highly leveraged deposit-funded model and this suggests the shift is less a passing crypto fad and more a structural change that could reshape how money moves through the financial system.
