Cross-border payments have long been subject to operational complexities, cost structures and transparency limitations.

“The current system does a good job, especially if payments are following the ‘happy path’ to high-traffic corridors during operating hours,” explains Chase Riggins, Managing Director, Strategy & Advocacy Executive – Global Payments Solutions at Bank of America. “But if you’re sending payments outside operating hours or through correspondent banks, you may end up with delays or incremental costs.”

While significant progress has been made in this space, says Riggins, there’s still room to reduce friction for the bank’s clients. And tokenized cash – a category that includes stablecoins as well as tokenized deposits – seeks to solve some of this friction.

Tokenized cash could offer improved transparency, lower costs and faster settlement speeds. These improvements are most meaningful for ‘long-tail’ corridors where transactions tend to include multiple correspondent banks, resulting in delays, higher costs and operational complexity for clients.

In contrast, the tokenized model creates a more direct path from sender to recipient, alleviating some of this friction. “So while traditional payment rails continue to be widely trusted and used, we do think that stablecoins and other tokenized cash models offer an opportunity for improvement for our clients,” Riggins notes.

Real-world use cases

Today, much of the activity in this space is associated with cryptocurrency trading. Typically, this involves moving from positions in more volatile tokens such as Bitcoin or Ethereum into stablecoins such as Tether’s USDT or Circle’s USDC that are pegged to fiat value.

Market participants are also using tokenized cash as a currency hedge. “For example, if you’re in a high-inflation jurisdiction, you might prefer exposure to U.S. dollars instead of the local fiat currency,” says Riggins. “One way you can do this is by holding stablecoins, which are often tied to U.S .dollar.” As of 2025, non-payments use cases including cryptocurrency trading and hedging against local fiat inflation made up over 95% of the adjusted transfer volume in the stablecoin market, according to Allium data.¹

“However, we’re also seeing experimentation from traditional finance players, fintechs and digital native firms that have integrated on-chain technology,” says Riggins. “These firms are largely using stablecoins for cross-border flows and internal treasury movements.”

As this area develops, he argues there is a clear opportunity for businesses to use tokenized cash for cross-border business-to-business payments, such as paying suppliers or wholesalers. “In time, we can also envision use cases for consumers, such as using tokenized cash to send money back to family overseas.”

A further use case is around cash leg settlement for other tokenized assets such as tokenized securities in delivery-versus-payment (DvP) models. “When assets are travelling on-chain, you need a corresponding store of value to move simultaneously, so that you’re moving the asset and the cash at the same time,” Riggins observes.

Which markets are adopting tokenized cash?

While adoption continues apace, not all markets are adopting tokenized cash at the same rate.

“Broadly speaking, we’re seeing greater adoption in emerging markets, with slower adoption in mature markets where established players are seeking more efficiencies and clearer real-world use cases,” says Riggins.

“In particular, we’re seeing slower adoption in the United States as we await legislative and regulatory clarity, and as we evaluate meaningful improvements over the existing infrastructure. Globally, we’re seeing more momentum in locations where the regulatory framework is already in place, such as in the EU, UK and Singapore.”

How will corporate clients benefit?

When it comes to payments, Riggins notes that “faster is generally better”. But for the bank’s clients, other attributes are often more important – such as having the option of sending payments using preferred methods, as well as cost and certainty of payment. “So as well as giving clients access to payments that are fast enough for their requirements, we’re also focused on meeting these other needs.”

Stablecoins, in particular, offer increased payment speed – but there are still open questions about whether they can address the other characteristics that corporate clients are seeking.

According to Riggins, large multinationals are the most likely to benefit from stablecoins – particularly companies that send large cross-border payments or high velocity payments. If those companies also have advanced technology stacks, they will more easily see the benefits of stablecoins.

Then, as the infrastructure becomes more standardized and better integrated into existing technologies, regional companies and smaller players will likely enter this space as well.

“Given that our client base spans this entire spectrum, we’re evaluating how we can meet the needs not just of multinational clients, but also of regional players that may be looking to harness these developments in the future,” Riggins notes.

Risks and considerations

Alongside the benefits, it’s important to note that digital assets and stablecoins do introduce a new set of risks and considerations for treasurers.

“Pre-funding is one notable issue, albeit one that also applies to existing payment methods and correspondent models,” says Riggins. “We’re looking at tokenized models to see which benefits can be achieved while minimizing pre-funding requirements.”

Other potential issues include conflicting legal frameworks across jurisdictions, which can make cross-border payments complex when sending and receiving in two different frameworks. Another consideration is that unclear liability frameworks in some jurisdictions can lead to a lack of clarity in the case of errant transactions or disputes.

There are also open questions around how stablecoins are measured and recorded on the balance sheet – and in jurisdictions like the United States, unclear regulatory frameworks can make it difficult to determine the role that banks can play.

Further risks include compliance risk in terms of anti-money laundering, and requirements that may be placed on banks or other participants. Operational risk is also a challenge, due to issues such as dependency on third parties and integration with public blockchains.

But while there are plenty of risks to bear in mind, these are not stopping treasurers from exploring the opportunities. “There is certainly plenty of respect for the risks involved – but there’s also a desire to better understand the ecosystem, the applications that these assets may have, and the potential benefits,” says Riggins.

From pilot projects to mainstream adoption

As the industry moves forward, a key question is how digital assets will bridge the gap from exploration and pilot projects to mainstream adoption by corporate treasurers.

“For this to happen, market participants will need a clear understanding of what’s permissible, and what’s required to make the ecosystem function efficiently and effectively,” Riggins says. “This will require a clear regulatory framework across jurisdictions, and more clarity for banks about the requirements for participating.

“As with any type of network, adoption and growth are limited by the number of parties that are willing to participate. For example, some modern payments systems have seen slower adoption of send capabilities than receive, and that has muted overall network growth. As such, the broader adoption of tokenized cash will require both senders and receivers that are willing participants in the network.”

At the same time, corporate clients and other participants will need to see real benefits, as well as integration with existing payment systems and market offerings, so that treasurers can use their current systems to execute transactions using tokenized cash.

“Unless all these components come together, growth is likely to be modest but steady,” Riggins notes.

Proactively exploring tokenized cash

A certain amount of evolution may be needed before tokenized cash becomes mainstream – but that doesn’t mean banks are sitting still.

“At Bank of America, we’re proactively exploring these capabilities, and are making sure we can provide our clients with the services and solutions they need,” says Riggins.

“Looking forward, we believe digital assets will play a meaningful complementary role to the existing financial market. As regulators provide greater clarity in the coming years, we expect to see more specific use cases and corridors where digital assets can provide an advantage to our clients.

“The pace of evolution will depend on this regulatory clarity, as well as the appetite for adoption by our clients – but our mission at Bank of America is to ensure we are prepared, whenever our clients seek to access digital assets capabilities.”