For a multinational company, having enough cash is not always the same as having it in the right place at the right time. A business may have funds available in Singapore to cover a supplier invoice due in New York, but if the transfer cannot settle until Monday, the overall balance does not solve the immediate payment problem.
Companies often deal with this by moving money in advance or holding extra cash in the accounts where future payments may be due. Both approaches tie up liquidity that could be deployed elsewhere. In some cases, a company may even borrow in one country while its own cash sits idle in another.
Banks are trying to reduce that friction. On Sept. 5, DBS and Citi in New York completed a U.S. dollar payment between Singapore and the United States in minutes, according to DBS’s announcement. The transaction used tokenized deposits—bank deposits represented as digital tokens—through SWIFT’s digital ledger.
The announcement outlined the payment route, but the banks have not disclosed the transaction amount or confirmed whether the service will be broadly available to customers. Even so, the test offers a concrete example of the product banks want to build: faster cross-border movement of corporate money, including outside normal business hours.
The incentive is significant. Companies that keep cash at a bank also pay for currency conversion, financing, treasury services and other financial products. If a rival provider offers a better way to store or move that money, banks risk losing both the balances and the fees attached to them.
That competitive pressure is also behind efforts by 21 financial institutions to establish a stablecoin business. Banks are exploring more than one form of digital money because corporate customers need different ways to pay. In each case, the banks want to remain the institution customers rely on.
Why waiting for the next business day can be costly
International payments usually require several banks to coordinate. The sender’s bank may rely on correspondent banks, intermediary accounts or other payment services to reach the recipient. Each step depends on the participating institutions having sufficient liquidity and being open to process the transaction.
Payment instructions can move quickly, but settlement—the point at which the financial obligation is completed—can take longer. Making settlement available more often would allow companies to move funds closer to the moment they actually need to spend them.
Consider a company that places $10 million in an account two days early to ensure a payment will go through. Banks call this prefunding. If the company borrows that money at an annual rate of 5%, the added borrowing cost for two days is about $2,740 before accounting for any interest earned on the balance.
| Item | Amount |
|---|---|
| Money moved two days early | $10 million |
| Annual borrowing rate | 5% |
| Extra borrowing cost for two days | About $2,740 |
Calculation: $10 million × 5% × 2 ÷ 365. This example does not describe an actual DBS payment or a measured saving. Any interest earned on the account balance would reduce the net cost.
Companies using their own cash face a similar tradeoff. Money parked for payment readiness cannot be used for investment, debt reduction or other business needs.
Across many accounts and repeated payments, those extra balances can add up quickly. Faster transfers could allow companies to keep less cash waiting in each location.
However, if a company must move funds early into a special account to access a faster network, some of the same cost remains. The money is still waiting; it is simply waiting somewhere else.
Instant payments can also require more liquidity at a specific moment than systems that offset obligations against one another.
For example, if two banks owe each other $10 million and $8 million, a netting arrangement could allow them to settle only the $2 million difference instead of funding both payments separately. This reduces the cash needed to complete settlement.
For businesses comparing payment services, the full cost matters. Speed is valuable when it helps companies use cash more efficiently, but it must be weighed against prefunding requirements, fees and liquidity needs.
Tokenized deposits put bank dollars on a ledger
Tokenized deposits preserve the basic bank-deposit relationship. The bank still owes the customer the money in the account, while the token records that claim in a form that can be used by a participating payment system. The customer’s rights remain tied to the deposit account and the terms of the product.
Reserve-backed stablecoins work differently. Their issuers hold assets intended to support the tokens’ value and redemption. The tokens can then move between users on supported networks, while the reserve assets are held elsewhere.
| Form of money | Who owes the customer | Where it can be used |
|---|---|---|
| Ordinary bank deposit | The account-holding bank | Through the payment services supported by the bank |
| Tokenized bank deposit | The bank, under the deposit’s terms | Within the participating system and its supported connections |
| Reserve-backed stablecoin | The issuer, under the token’s redemption terms | Through compatible wallets and services, subject to restrictions |
Deposit insurance, eligibility and redemption rights depend on the jurisdiction and the specific product.
The Bank for International Settlements has also highlighted another distinction. Banks can settle obligations to one another in central-bank money, which supports transfers at face value. Stablecoins traded between holders, by contrast, can move at market prices that differ from their intended dollar value.
Banks have reasons to support both tokenized deposits and stablecoins. Deposits help fund their lending businesses, and customers who use bank accounts for payments may also buy other services. Stablecoin issuers can earn income from the assets backing their tokens, although operating costs and partner payments reduce that revenue.
A Sept. 1 announcement from the 21 institutions outlined plans for a dollar-denominated offering in the first half of 2027. Broader support for other G7 currencies is a longer-term goal, with the euro identified as a priority. The new company remains subject to closing conditions, and the announcement did not explain how members would share future revenue.
These institutions already have corporate customers that trust them with large payments. Those customers have completed identification checks, provided business records and established points of contact for resolving problems. Buying another financial service through an existing banking relationship is often easier than starting with a new provider.
Money used to purchase stablecoins can also return to banks through the issuer’s reserve accounts. The competition is therefore not only about which institution controls the customer relationship, but also about which entity holds the underlying balances.
Citi is involved in both the tokenized-deposit payment and the separate stablecoin initiative. That dual role makes sense if companies choose payment methods based on whom they need to pay. Some suppliers may prefer traditional bank accounts, while others may already accept stablecoins.
Connectivity may be the harder challenge
Existing payment systems already provide some of the capabilities banks are promising. The European Central Bank’s TIPS service offers around-the-clock settlement for supported currencies. New token-based services will need to compete on coverage, reliability and total cost.
Cross-border payments also depend on what happens after funds arrive. A dollar payment may reach a recipient on Saturday, but conversion into local currency may still have to wait. Even when conversion is available, pricing may be less favorable than on a normal business day.
The same issue applies across separate bank networks. If the recipient’s bank cannot accept the sender’s token, someone must connect the two systems. Without that interoperability, customers could end up managing more accounts and shifting funds between them to complete payments.
Stablecoins can be useful where many services already accept the same token. Bank-based systems may appeal to companies that want to keep using familiar accounts and established relationships. Customers will ultimately judge both models by whether the money becomes spendable where it is needed and whether support is available when a transfer fails.
For banks, faster digital payments are more than a technology upgrade. They are a way to retain customer balances and the recurring business that comes with them. For corporate treasurers, the benefit is practical: fewer situations where a company has enough cash to pay a bill but cannot get it into the right account in time.
Making that work reliably, at a competitive price and across enough payment corridors is what would turn a successful weekend transaction into a service companies can use every week.
