According to Adam Levine, CEO of Fireblocks Financial Services, digital money, stablecoins, tokenized money-market funds and DeFi lending are fundamentally changing how institutions approach treasury and liquidity management. Traditional treasury teams have a core responsibility of ensuring the right currency is available at the right time for employees, vendors, and obligations, but institutions often maintain larger cash balances than they would ideally like due to operational friction in traditional financial infrastructure. Money-market funds can provide relatively low-risk returns, but moving funds into and out of them involves operational friction, costs and delays. Digital assets offer a solution where institutions can move value on-chain between jurisdictions and convert it back into local fiat through appropriate infrastructure.
According to Gravity Team CEO Mārtiņš Beņķītis, stablecoin payments can cross borders within seconds, but converting them into spendable local currency remains a slower and more fragmented process. The company's corridor analysis found that correspondent banking can leave the equivalent of 20% to 40% of monthly transaction flow in pre-funded accounts. Gravity Team estimates that stablecoin settlement costs between 0.1% and 0.4% of the principal across the corridors it studied, while correspondent banking ranges from 3% to 11% after including foreign-exchange spreads, intermediary charges, and capital held in pre-funded accounts.
As reported by Fireblocks, stablecoins provide three potential drivers for institutional adoption: more efficient use of liquidity, reduced payment-related risk, and in some cases, lower costs. For many institutions, the initial use case for digital assets is not investment but payments. Cross-border payments provide a clear example where traditional international transfers can involve correspondent banks across multiple jurisdictions, foreign-exchange processes and settlement delays. Stablecoins can provide an alternative settlement layer where institutions can move value on-chain between jurisdictions and convert it back into local fiat through appropriate infrastructure. The attraction extends beyond speed, offering institutions a way to improve existing financial processes without becoming crypto businesses.
As reported by crypto.news, stablecoin payment infrastructure faces a liquidity challenge because the same tokens perform different functions across trading and payments. Market makers hold stablecoins to quote buy and sell prices, move inventory between exchanges, and respond to trading activity changes. Payment companies use stablecoins to fund conversions before releasing local currency to recipients. Beņķītis explained that "stablecoin payment infrastructure is a liquidity story because stablecoin balances serve very different jobs." The company currently supports settlement involving the Philippine peso, Indonesian rupiah, Mexican peso, Brazilian real, euro, British pound, and U.S. dollar, with plans to add the Vietnamese dong.
According to Gravity Team's internal data, between 3% and 7% of traditional inbound wires in Southeast Asian and Latin American corridors are delayed or returned on their first attempt. Stablecoin transfers in those markets reportedly clear on-chain more than 99.9% of the time once broadcast. However, Beņķītis cautioned that the on-chain success rate does not cover the entire payment process, noting that "local conversion and payout still have to complete after the token arrives." The company's institutional OTC desk offers stablecoin settlement in under 60 seconds and T+0 fiat settlement in more than 20 currencies where local banking conditions allow.
According to Fireblocks, institutions do not have to choose between 'traditional finance' and 'DeFi' as two completely separate worlds. They can allocate different portions of their liquidity according to operational needs and risk tolerance. Fireblocks' integrations with Morpho and Aave are designed to allow clients to access lending pools while retaining the security and controls required by institutional treasury operations. At the more conservative end are tokenized money-market funds that essentially bring familiar financial instruments onto blockchain infrastructure. For institutions willing to accept more risk in exchange for potentially higher returns, DeFi lending represents another option where stablecoins can be supplied to liquidity pools with different risk and return profiles. The increasing sophistication of institutions and financial professionals involved in designing these pools is making the market more accessible to traditional financial participants.
