Key Insights from the RWA London Summit 2025
A recent panel discussion at the RWA London Summit in February 2025 featured experts from across the digital assets industry providing valuable insights into the evolving stablecoin landscape. The panel, titled “Stablecoins: Building the Bridge to Traditional Finance,” was moderated by Mike Manning, former Head of Blockchain & Digital Currencies at Amazon who worked on the digital euro project. Panelists included Dovile Silenskyte (Director of Digital Assets Research at WisdomTree), Jannah Patchay (Founder and Director of Markets Evolution), Lux Thiagarajah (Director of Growth at OpenPayd), and Jude Fredrick (Director of Business Development at Cryptochill by DeusX).
Emerging Use Cases
The panel highlighted a significant shift in stablecoin usage patterns over the past 18-24 months. While crypto trading remains the dominant use case (accounting for 91% of usage according to Ripple’s research cited by Silenskyte), cross-border payments are emerging as a compelling application driving stablecoin adoption.
This shift coincides with a notable decoupling of stablecoin usage from cryptocurrency prices. Historically, stablecoin activity correlated strongly with Bitcoin and Ethereum price movements. However, as Lux Thiagarajah, Director of Growth at OpenPayd, pointed out, around 18 months ago, this pattern began to change, with stablecoin usage continuing to grow regardless of cryptocurrency market conditions.
A key catalyst for this transition was the collapse of crypto-friendly banks like Silvergate and Signature, which drove businesses to seek alternative dollar-based settlement rails. Thiagarajah emphasized that payment processors now need to be “rail agnostic,” incorporating not just traditional systems like SWIFT, SEPA, and FPS, but also blockchain networks like Tron and ERC-20.
The cross-border payment use case is particularly compelling for several reasons:
- Greater transparency
- Faster settlement
- Lower costs
- Simplified currency conversion
The panelists also highlighted two additional emerging use cases:
- Yield generation: Thiagarajah noted that unlike traditional EMIs and payment processors that cannot offer interest on fiat balances, stablecoins provide opportunities for users to earn yield on their holdings, particularly for clients in sectors like CFDs who need offshore dollar banking.
- On-chain settlement for tokenized real-world assets (RWAs): Jannah Patchay emphasized that as the tokenization of traditional assets grows, stablecoins are positioned as the primary digital settlement asset, particularly given the absence of widely available CBDCs and the closed-loop nature of tokenized deposits.
The Need for Non-USD Stablecoins
Lux Thiagarajah highlighted a striking disconnect in the stablecoin market: approximately 99% of stablecoins are USD-denominated, yet the dollar represents only:
- 85% of FX transactions
- 40% of SWIFT transactions
- 60% of global FX reserves
This disparity highlights a significant opportunity for non-USD stablecoins, particularly in:
- FX markets: Thiagarajah cited research from Warwick Business School demonstrating that EUR/USDC trading on Uniswap consistently remained within 20 basis points of traditional EUR/USD forex rates. This level of efficiency could dramatically reduce costs for companies conducting cross-border transactions.
- Regional trade development: Jannah Patchay noted that current correspondent banking routes often follow colonial-era paths, creating inefficient payment flows. She provided an example where a payment from Kenya to Senegal might route through London, New York, and Paris before reaching its destination, adding costs and delays. Patchay argued that non-USD stablecoins could facilitate more direct regional trade and payment networks, particularly in Africa and Asia.
The emergence of on-chain FX settlement was highlighted as a potential catalyst for non-USD stablecoin adoption, with platforms like Cumberland and Zodiac Markets already demonstrating T+0 settlement for transactions between different stablecoins.
Stablecoins vs. Tokenized Treasury Funds
The panel addressed the blurring lines between payment stablecoins and yield-bearing financial products like tokenized money market funds. Patchay emphasized that while both maintain a stable value, they serve fundamentally different purposes:
- Payment stablecoins are designed primarily for transactions and value transfer
- Tokenized money market funds and similar products are intended for investment and collateral
Dovile Silenskyte from WisdomTree described their U.S. tokenized funds (including one yielding over 4%) that allow investors to earn returns while maintaining immediate liquidity for payments. However, most panelists, including Patchay and Thiagarajah, agreed that these products would likely remain distinct, with different pricing mechanisms and regulatory treatments.
Thiagarajah highlighted how tokenized funds could have provided a solution during the UK’s 2022 gilt market crisis under Liz Truss, allowing pension funds to use tokenized assets as collateral rather than selling underlying assets, potentially preventing the market disruption that eventually required Bank of England intervention.
Market Structure and Competition
The current stablecoin market is dominated by Tether and Circle (USDC), which together control over 85% of the market. Panel members had differing views on whether this duopoly would persist:
- Jude Fredrick saw significant profit opportunities attracting new entrants, especially with what he perceived as a more crypto-friendly U.S. administration
- Lux Thiagarajah believed the leaders would maintain their positions while expanding in different directions:
- Tether continuing to serve higher-risk jurisdictions and “banking the unbanked”
- Circle focusing on traditional finance institutions, particularly following its acquisition of Hashnote
Thiagarajah also mentioned Ripple’s RL USD as a potential emerging competitor due to the company’s established payment networks and banking relationships.
Tether’s announcement of Lightning Network integration to improve speed and reduce transaction costs was discussed by Fredrick, who saw it as opening opportunities for new market entrants. However, Thiagarajah questioned whether traditional financial institutions would adopt Tether despite these improvements, given regulatory considerations.
Silenskyte also noted an emerging stablecoin innovation generating high returns through basis trading (going long on Bitcoin while shorting futures), though Jannah Patchay cautioned this was more accurately categorized as a financial derivative rather than a stablecoin.
Regulatory Considerations
While the panel didn’t have time to fully explore the regulatory landscape, Jannah Patchay emphasized the importance of clear terminology and categories. She noted that the term “stablecoin” has become an unhelpful umbrella covering diverse products with different risk profiles and use cases. Patchay explained that regulators increasingly distinguish between:
- Payment stablecoins intended for transactions
- Tokenized money market funds regulated as securities
- Other tokenized assets with their own regulatory frameworks
Fredrick alluded to the repeal of SAB 121 (Staff Accounting Bulletin) as a regulatory change that could allow large traditional financial institutions like JP Morgan and Visa to enter the stablecoin space. The regulatory clarity (or lack thereof) was recognized by all panelists as a significant factor in institutional adoption and market evolution.
Recent Developments
Since this panel discussion, several notable developments have occurred in the stablecoin space:
- PayPal’s stablecoin expansion: PayPal’s PYUSD has gained significant traction and expanded its blockchain support beyond Ethereum to include Solana, enhancing its utility for cross-border payments and Web3 applications.
- Regulatory progress: The EU’s Markets in Crypto-Assets (MiCA) regulation has begun implementation, providing clarity for stablecoin issuers in Europe, while the U.S. continues to work through a patchwork approach at both federal and state levels.
- CBDC momentum: Several central banks have accelerated their CBDC development efforts, potentially creating future competition (or complementary infrastructure) for private stablecoins.
- Increased institutional adoption: Major financial institutions like JPMorgan, BNY Mellon, and Franklin Templeton have increased their engagement with stablecoin technology, particularly for settlement and tokenized asset applications.
These developments reinforce the panel’s observations about the evolving use cases and market structure of stablecoins, positioning them as an increasingly important component of both traditional and digital financial infrastructure.
This article summarizes the “Stablecoins: Building the Bridge to Traditional Finance” panel at the RWA London Summit 2025, which brought together 200 senior executives from institutions including Fidelity, State Street, and LSEG to explore the future of tokenized real-world assets.
