Barclays Eyes Blockchain to Modernize Payments and Deposits

• Barclays explores blockchain to enable stablecoins, tokenized deposits, and payments.
• Global banks accelerate digital asset adoption to compete with fintech and Meta.
• PayPal and MoonPay launch PYUSDx to power custom stablecoins using PYUSD liquidity

Barclays is weighing a deeper move into blockchain as global banks race to modernize payments. The $2 trillion lender has begun reviewing technology partners to build a new platform that could support stablecoins and tokenized deposits. 

The effort signals a broader shift across traditional finance as digital assets gain traction in mainstream banking. Consequently, competition between banks and fintech firms continues to intensify.

Barclays Explores Blockchain for Core Banking Services

Barclays Plc has sent requests for information to select technology providers. The bank wants to design infrastructure that can handle payments and deposits on blockchain rails. Executives aim to shortlist potential partners by April. Moreover, the project could expand into settlement services and cross-border transfers.

Stablecoins sit at the center of these discussions. These digital tokens usually track fiat currencies like the US dollar. They allow faster transfers and operate around the clock. 

Hence, they challenge traditional banking systems that rely on limited operating hours. Bloomberg Intelligence estimates stablecoins could process over $50 trillion in annual payments by 2030.

At the same time, tokenized deposits offer banks a defensive strategy. These assets represent customer deposits on-chain while remaining within regulated institutions. Consequently, banks can maintain customer relationships while offering blockchain-based efficiency.

Banks Respond to Growing Stablecoin Competition

Barclays does not stand alone in this shift. JPMorgan Chase has already rolled out its JPM Coin to institutional clients. HSBC plans to expand its tokenized deposit services in the US and UAE this year. Additionally, other global lenders continue testing blockchain settlement tools.

However, blockchain volumes remain small compared to traditional systems. Banks have tested distributed ledger technology for over a decade. Yet large-scale adoption has progressed slowly. Significantly, the rising demand for instant payments now accelerates that timeline.

Meanwhile, technology firms push aggressively into digital payments. Meta explores stablecoin integrations across its platforms. Fintech companies also develop customized token solutions for businesses.

PayPal, MoonPay, and the Custom Stablecoin Push

In parallel, PayPal and MoonPay have launched PYUSDx, a framework for custom stablecoins. The product builds on PayPal’s PYUSD stablecoin and M0’s infrastructure. 

Businesses can issue application-specific tokens with lower operational costs. Moreover, these tokens tap into PYUSD’s on-chain liquidity, which carries a market value near $4.2 billion.

Related: Stripe Eyes PayPal Acquisition as Valuation Reaches $159 Billion