Stablecoin advocates have argued that blockchain networks are capable of solving problems that traditional banking never could.
Payments will be settled in seconds instead of days. Businesses will no longer wait for banks to reopen after weekends or holidays. Cross-border transfers will rely less on correspondent banking relationships which add cost, delay and operational complexity.
European policymakers have sought to achieve the same goals without abandoning the banking system. Instead, they rewrote the rules that govern it.
MasterCard‘s review Of its ownership vocalalink It comes as Europe completes one of its largest payment infrastructure projects since the launch Single European Payments Area.
Europe’s instant payments framework entered a new phase this year as banks continue to implement requirements Regulation (EU) 2024/886a law passed in 2024 that requires payment service providers to make instant, widely available credit transfers in euros within phased deadlines. The regulation requires payment service providers that already implement credit transfers in euros to support instant payments in euros according to phased implementation dates. It also prohibits higher rates for instant transfers than standard credit transfers and requires a beneficiary verification service designed to reduce fraudulent and misdirected payments before funds leave the account.
These requirements reflect years of work before European Commission and European Payments Council To make instant settlement a normal feature of banking services. The panel concluded that adoption of instant payments remained uneven because many institutions either failed to provide the service or charged customers more to use it. Regulation 886/2024 addresses both barriers directly by making instant payments widely available under comparable pricing rules.
The list is located on SEPA Instant Balance Transfer (SCT Inst) Scheme maintained by the European Payments Council. Under the EPC rulebook, participating payment providers exchange payments in euros 24 hours a day, seven days a week, with execution measured in seconds rather than business days.
A decade ago, Treasury executives weighing faster cross-border payments had relatively few options other than correspondent banking. Today, a finance team that moves euros between participating institutions within the SEPA area can settle funds almost instantly while remaining entirely within the regulated banking system.
This changes the comparison with stablecoins. The question is no longer whether distributed ledger technology can move value quickly. maybe. But the lingering issue may be whether treasuries are getting enough additional interest from stablecoins to justify offering another payment path when the banking infrastructure already provides instant settlement in euros.
PYMNTS INTELLIGENCE Research suggests that financial executives do not answer this question in a uniform way. “Stablecoins Are Gaining: Why CFOs See More Promise From Cryptocurrencies“Found that 42% of mid-market CFOs reported discussing, testing, or using stablecoinsCompared to 30% for cryptocurrencies. However, live deployment remains limited, with only 13% reporting using stablecoin production.
The numbers suggest that curiosity has outpaced implementation as finance departments evaluate where digital assets fit within existing treasury operations rather than treating them as a wholesale replacement for traditional banking.
Where stablecoins still have room to compete
Among companies already using stablecoins, receiving cross-border payments is among the leading use cases, along with settlement with payment and financial services providers. However, 88% of companies that receive stablecoins immediately convert them into US dollars rather than keep them on the balance sheet, the PYMNTS Intelligence report found. This behavior indicates that companies continue to view stablecoins primarily as settlement mechanisms rather than treasury assets.
Some restrictions continue to slow adoption. The report revealed that 67% of CFOs cited regulatory uncertainty as an obstacle to using stablecoins, while 43% cited integration with existing financial systems. Even among companies experimenting with digital assets, integrated access with banks ranked ahead of fintechs, exchanges and self-custodial wallets.
Europe has tried to address these concerns through a second regulatory initiative. the Markets in Cryptoassets Regulation (MiCA) Establishes supervisory requirements for issuers of e-money tokens and asset tokens, including reserve management, redemption rights, and governance and disclosure obligations. The result is a multifaceted market structure. Europe now has detailed regulatory frameworks governing both instant banking payments and stablecoins, leaving treasury institutions to evaluate each on operational rather than regulatory grounds.
Vocalink runs the payment infrastructure in the UK rather than the EU, but the discussion surrounding its future comes as Europe shows a different approach to payments innovation. Instead of replacing commercial bank money with digital alternatives, policymakers have focused on making bank money move with the speed and availability that many stablecoin projects promised from the beginning.
For payments within the SEPA region, the strategy has narrowed the gap between traditional banking and blockchain settlement. Outside of Europe, where correspondent banking, foreign exchange, and fragmented payment systems still shape business transactions, accounts may look different.
Stablecoins have more space as SCT Inst cannot complete the entire journey. The SEPA covers payments in euros within its geographical area. Payments from Germany to Brazil, France to Singapore, or Italy to the United States still face foreign exchange, non-European banking systems and, in many cases, correspondent banks.
This is likely to remain a testing ground for stablecoins, even as Europe claims that regulated instant banking payments could meet many of the same treasury requirements.
