Payments modernisation: a once in a generation opportunity

The rate of change in payment innovation in the last few years has been nothing short of dizzying; successive waves of new technology including blockchain, tokenisation, stablecoins, and AI. The level of disruption from the impact of compounding new technology in a relatively short period of time is hard to understate. Knowing how these trends intersect, and finding real value amongst the hype, can be challenging.  

Innovation landscape

Blockchain has been around since 1991, and rather unkindly, until relatively recently was sometimes referred to as a technology looking for a problem to solve! Initially cryptocurrencies dominated headlines, and while the parabolic growth attracted speculative investors, in the absence of clear regulation there were a plethora of scams and hacks, resulting in negative press, and more importantly billions of USD of economic harm.

Fast forward to today, and stablecoins and tokenisation are moving into the mainstream. The conversation has shifted from speculative digital assets, to practical settlement tools. More importantly, they are not simply new payment methods, rather they represent a broader shift towards cloud-native infrastructure, real-time settlement, programmable money and AI-enabled financial operations. 

Individually, they offer genuine innovation in the financial ecosystem. Stablecoins are digital money that combines the speed and programmability of blockchain with the stability of traditional currencies. They offer programmable, near-instant movement of value, without traditional banking cut-off times, and has significant potential to streamline treasury management, liquidity movements and cross-border settlement.

Tokenisation is the conversion of real-world assets or cash into digital tokens that can be stored, transferred, and traded electronically on a blockchain. Together they represent a unique opportunity to fundamentally change the way we move value around the world – making it quicker, cheaper, and potentially more democratic.

Stablecoins: implications for technology strategy

Banks and payment providers are under pressure to reduce costs, increase settlement speed and create more resilient payment infrastructure. Legacy correspondent banking rails can struggle to meet demands for real-time, global commerce. The uptake for stablecoin has been, unsurprisingly, enthusiastic. At the time of writing, the market cap for stablecoin is over $300bn USD, making it a systemically important asset.

In terms of adoption, much of the traditional finance world are onboard, with a number of large firms launching digital money, including JPMorgan’s JPMCoin, Société Générale issuing a EURO Stablecoin EUR COinVertible, and the Wells Fargo WFUSD.

Some of the world’s largest payment firms, also, are enthusiastically embracing cryptographic assets in their payment rails. Visa has launched the Visa Stablecoin Platform (VSP), allowing financial institutions to mint, transfer and manage stablecoins. Stripe supports USDC stablecoin payments, to allow merchants can accept stablecoins while Stripe handles blockchain complexity and settlement in the background.

Mastercard was among the firms involved in testing blockchain-based payment ecosystems and appears in industry initiatives such as Open USD. In short, even for firms trying to avoid stablecoins, it is likely they will be powering much of the payment infrastructure in the medium term. Indeed, in July 2026 more than 140 banking and technology organisations came together to launch the Open USD stablecoin initiative.

Tokenisation 

The tokenisation of real-world assets (RWAs) is the process of representing assets such as cash, bonds, funds, real estate, or commodities as digital tokens on a blockchain. This enables traditionally illiquid assets to be transferred, traded, and settled more efficiently, with the potential for near real-time settlement, greater transparency, and fractional ownership. Adoption is accelerating across traditional finance, with firms including JPMorgan, BlackRock, Franklin Templeton, UBS, HSBC and Société Générale actively developing tokenised cash, funds, bonds and securities solutions. While still in the early stages, tokenisation is increasingly being viewed as the next evolution of financial market infrastructure, with institutions using it to improve liquidity, reduce operational costs and enable new forms of programmable financial services.

Near term opportunities

To my mind, cross-border payments remain one of the biggest opportunities.  International payments continue to be expensive, slow and operationally complex, and stablecoins could help reduce intermediaries and improve settlement efficiency.  There are also huge potential upsides for the unbanked (estimated to be around 1.3 billion adults globally) offering massive potential for financial inclusion, economic growth, and new markets for firms seeking to expand their customer footprint.  Interestingly the challenger brands, always quick to innovate, are already using digital assets to fuel their growth (particularly Revolut, Stripe Paypal) and high street banks risk being left behind.

Break on progress

A few caveats exist of course; regulatory clarity has been slower than some may like, and the institutional adoption depends on trust, governance and regulatory certainty. With increasingly clear regulatory frameworks more firms are likely to invest in adopting stablecoins and tokenisation.  

There is also, quite rightly, focus on operational resiliency. Modern payment infrastructure must be resilient, secure and available at all times. New payment technologies cannot come at the expense of operational stability. The more interesting question is whether the technology betters what we already have. Recent industry wide outages hit the mainstream press (the July 2026 fiasco that simultaneously effected Lloyds, HSBC, Halifax, Barclays and Monzo)  - would stablecoins have prevented millions being locked out of their banking?

Agentic AI is also an interesting layer to the modernisation of payments. As AI agents increasingly take actions on behalf of individuals and businesses, traditional payment mechanisms will likely prove too slow and fragmented.  Digital payment tokens could become a natural enabler for machine-to-machine commerce. Visa, Mastercard, Paypal and Stripe already have agentic capabilities, and my guess is that this is likely to percolate to the rest of retail financial services.

How to turn innovation into commercial advantage?

I am yet to meet a regulated firm who is not interested in reducing cost and risk – indeed their profitability depends on it.  The winners will be those that modernise the entire payments value chain. For a vendor agnostic conversation about the technology that will positively effect your bottom line, contact Softcat today.