The Rise of Tokenized Cash Settlements

Tokenised cash has matured into a multi-hundred-billion-dollar ecosystem at the centre of institutional finance. As of September 2025, the sector holds close to $300BN in circulation. Stablecoins dominate with c. $270BN, accounting for around 90% of the market. Tokenised treasuries and money market funds (MMFs) have surged to $8BN after an 80% increase this year, while the broader real-world asset tokenisation segment excluding stablecoins has expanded 600% to c. $28BN. These figures confirm that tokenisation is no longer at the experimental stage but is embedded in institutional liquidity and payment operations. 

Three distinct models define the landscape. Stablecoins provide 24/7 payment rails that operate outside traditional clearing systems. Tokenised MMFs deliver blockchain-native yield strategies and new liquidity instruments. Deposit tokens offer instant settlement while remaining fully integrated into regulated banking. Collectively, these models signal a fundamental rethinking of financial market infrastructure. 

BlackRock’s BUIDL fund remains the flagship product with c. $2.3BN in assets under management across Ethereum, Polygon, Solana, Optimism, Arbitrum, Avalanche and Aptos. Although down from its June peak of c. $2.9BN, BUIDL has become the institutional benchmark. Franklin Templeton’s BENJI fund follows as the second largest. Goldman Sachs and BNY Mellon have strengthened distribution by integrating tokenised MMFs into BNY Mellon’s LiquidityDirect and Goldman’s Digital Asset Platform. 

The operational advantages are immediate. Treasury desks gain instant redemptions, dividend payments are automated through smart contracts, and liquidity is accessible at all times. Collateral management is now an important use case. BUIDL tokens can be pledged on Crypto.com and Deribit while continuing to accrue underlying yield. This addresses liquidity pressures such as those seen during COVID-19 and the UK gilt crisis when collateral proved slow to mobilise. 

Figure 1: Year on Year Growth of Tokenised Money Market Funds Market Capitalisation  

Source: RWA.xyz, AMINA Bank

Stablecoins remain the dominant instrument with c. $270BN in circulation. Tether leads with c. $166BN and a c. 61% market share, followed by USDC with more than $70BN. Average daily USDT transaction volumes of c. $20–25BN make stablecoins the largest blockchain-native payment network to date. 

The scale is extraordinary. In 2024, stablecoins processed c. $32TN in transactions, equal to c. 3% of global cross-border payments. McKinsey projects that their share could rise to 20% within five years, representing more than $60T in annual flows. Adoption is uneven across geographies, with Nigeria, Argentina and Vietnam leading in grassroots usage. In these markets, stablecoins are not only efficient but also provide resilience in volatile monetary environments. 

Deposit tokens have emerged as the most bank-centric model. JPMorgan’s JPMD, developed on Coinbase’s Base, is limited to institutional clients and combines regulatory oversight with real-time settlement. Citi has made tokenised deposits a strategic priority. DBS Bank, working with Ant International, has created multi-currency Treasury Tokens capable of clearing across more than 40 currencies instantly. 

The operational benefits are clear. Cross-border transfers are settled instantly without correspondent banks. Liquidity management becomes continuous, with internal estimates suggesting savings of around $150MN per year for every $100BN in deposits. Compliance processes are automated through programmable contracts that embed KYC and AML directly into settlement flows. 

The regulatory environment has moved decisively from theory to practice. In the United States, the GENIUS Act was signed in July 2025, establishing a federal stablecoin framework. It mandates 1:1 reserves in USD or Treasuries, places large issuers under Office of the Comptroller of the Currency (OCC) oversight, guarantees bankruptcy priority for holders, and prohibits interest payments. Implementation is scheduled for mid-2026. 

The European Union’s Markets in Crypto Assets (MiCA) regulatory framework takes a broader approach by classifying stablecoins as either e-money or asset-referenced tokens. It requires reserve disclosures, daily transaction caps, and licensing for issuers. In Asia-Pacific, regulators have advanced into live deployment. Singapore’s Project Guardian now involves more than 40 institutions across seven jurisdictions, while Hong Kong’s Project Ensemble has positioned the city as a hub for wholesale Central bank digital currency (CBDC) settlement. The mBridge project has processed HK$171MN in multi-currency transactions in under 30 seconds. Switzerland’s Project Helvetia has issued CHF 750MN in digital bonds using wholesale CBDC, and Australia’s Project Acacia is testing tokenised fixed income, private credit, receivables and carbon credits under ASIC oversight. 

The numbers underline the efficiency gains. Cross-border settlement times have collapsed from three to five days to under 30 seconds. Settlement costs have fallen from the traditional 6% of transaction value to 2–3%. Liquidity optimisation delivers around $150MN in annual savings for every $100BN in deposits. Tokenised MMFs are particularly transformative since they can be pledged as collateral while continuing to generate yield, reducing systemic risk. 

Market share is heavily concentrated. BlackRock controls more than 30% of tokenised MMFs, while Tether dominates stablecoins with a 61% share that regulators increasingly view as a systemic risk. JPMorgan holds a first-mover advantage in deposit tokens, but Citi and DBS are catching up rapidly. Multi-chain expansion has emerged as a differentiator. BlackRock’s decision to extend BUIDL to Solana this year shows that institutions are willing to embrace non-Ethereum ecosystems when performance benefits are demonstrable. 

Tokenised cash mitigates some traditional risks but introduces new ones. Atomic settlement removes counterparty and settlement risks. Deposit tokens carry Federal Deposit Insurance Corporation (FDIC) or central bank backing. Stablecoin risk still varies depending on reserve quality and issuer practices. Operational concerns remain around smart contract vulnerabilities, network congestion and custody security. However, institutional products such as BUIDL have processed billions without major incidents, strengthening market confidence. 

The evolution of tokenised cash reflects a clear shift in financial market infrastructure. Recent years have already shown consolidation among stablecoin issuers, rising bank participation in deposit tokens, and early central bank pilots of wholesale CBDCs. Between 2025 and 2026, regulatory frameworks such as the US GENIUS Act and Europe’s MiCA are expected to shape market structure more firmly, with stablecoins and bank-issued tokens coming under uniform oversight. 

The period from 2026 to 2028 is likely to highlight questions of interoperability as stablecoins, deposit tokens and CBDCs begin operating in parallel. Market experiments with atomic swaps, cross-chain bridges and harmonised compliance standards are expected to accelerate. By the end of the decade, many central banks plan to advance CBDC deployment, raising questions about how these public-sector initiatives will interact with private tokenised funds and stablecoin infrastructure. 

If current growth patterns persist, tokenised funds may represent several hundred billion dollars in assets, while the broader tokenised cash ecosystem could approach trillion-dollar scale. Whether this leads to a more resilient financial system or introduces new systemic risks remains an open question that regulators, banks and technology providers are still in the process of testing. 

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