Banks Face Digital Currency Infrastructure

A Finextra webinar, hosted in association with CGI, will examine the profitable roles banks can play in the operationalisation of digital money. The event will feature a panel of industry experts discussing the key challenges banks face with digital currency infrastructure, settlement, and control.

Sean Devaney, Vice-President of Market Strategy for Payments at CGI, Naveen Mallela, Global Head of Payments at Standard Chartered, and Lewis Sun, Global Head of Digital Currencies for Corporate and Institutional Banking at HSBC, will participate. Scott Hamilton, a Global Payments & Liquidity Expert and Contributing Editor at Finextra, will moderate the discussion.

Infrastructure and Process Requirements

The conversation is shifting from exploring use cases toward infrastructure and implementation. From an infrastructure perspective, banks face different challenges when it comes to Central Bank Digital Currencies (CBDCs), stablecoins, and tokenised deposits. The webinar will address the specific infrastructure and process requirements for each of these digital money forms.

Key questions include the bank's function in on- and offboarding processes. The panel will also consider minting and burning costs. These factors have significant implications for liquidity management, especially in an age where real-time payments are already reshaping liquidity considerations.

Settlement, Liquidity, and Control

Settlement and liquidity implications present major challenges for banks looking to expand their digital currency offerings. The discussion will probe whether there are hidden costs that are easily overlooked in this expansion.

Control becomes another critical aspect as alternative rails and digital money sit outside the traditional banking ecosystem. The webinar will explore which functions banks retain and which sit outside their control when many process aspects reside in systems they do not manage. This raises questions about how digital currencies differ from or overlap with banks' existing third-party outsourcing strategies.

Regulatory Compliance and Unexplored Opportunities

Banks must ensure internal governance and guardrails are established, a challenge for organisations operating under multiple jurisdictions with differing requirements. This is especially difficult considering many regulatory frameworks are still being established or honed. The webinar will ask how banks can safely and compliantly embark on the digital currency race while regulatory requirements are still evolving.

The panel will also examine underexplored opportunities banks can seize regarding their service and product offering in the digital currency space. Digital money is quickly reshaping the global monetary system. While the conversation around CBDCs seemed to stall in 2024, the announcement of the US GENIUS Act has kick-started new momentum around stablecoin adoption. This, in turn, lays the foundation for a fast-growing tokenised finance ecosystem.

The webinar aims to address the questions around infrastructure, settlement, and control that still need to be resolved as banks navigate this new landscape.