BlackRock: Stablecoins must integrate with bank and central bank rails

The core challenge lies in the principle of the “singleness of money,” where various forms of currency remain interchangeable at face value regardless of their underlying structure. When a user executes a payment via a dollar-denominated stablecoin, the recipient’s bank must be able to recognize the asset, convert it into a deposit liability, and provide clear legal recourse without creating uncertainty regarding the payment's value.

Integrating settlement layers

Banks require a robust settlement system to manage obligations between institutions. Sharma suggests that central banks should provide the final layer for this process, potentially through wholesale central bank digital currencies or fiat money. This model would allow commercial banks to handle retail-facing stablecoins while central banks maintain stability by managing the final settlement of obligations between regulated firms.

While tokenized markets offer the potential for continuous operation, they currently face a significant liquidity gap when traditional banking rails are closed. Tokenized asset transfers on a blockchain do not guarantee immediate settlement if the payment side remains dependent on conventional banking hours. Bridging this divide requires banking infrastructure to evolve toward broader acceptance and interoperability between tokenized deposits and stablecoins. Under the U.S. GENIUS Act, which established a federal framework for payment stablecoins in 2025, issuers must already navigate strict reserve and disclosure requirements. However, BlackRock emphasizes that regulatory compliance alone is insufficient; true functionality demands a seamless technical integration between private stablecoin issuers, commercial banking systems, and central bank clearing mechanisms.