Banks are shifting away from the idea that one stablecoin will eventually dominate the market, according to Swiss digital asset bank Sygnum. The focus is moving toward infrastructure that can support stablecoins, tokenized bank deposits, and tokenized money market funds together, giving institutional clients more flexibility across different forms of digital cash.
Thomas Eichenberger, Sygnum’s chief strategy officer and deputy group CEO, said institutional demand is not centered on picking a single winner. Large asset managers and corporate treasury teams want these instruments to work side by side. Their questions are about interoperability: how treasury operations can move across permissioned settlement, 24/7 cross-border transfers, and yield-bearing instruments with on-demand liquidity, all inside a regulatory setup they already trust.
Institutional demand is shifting to multi-instrument setups
Eichenberger said stablecoins on their own do not close the gap for institutional users. In his view, euro-pegged stablecoins have struggled to gain traction because they are difficult to access, lack direct bank backing, and do not connect smoothly with the rest of the financial system.
That is pushing banks toward a broader model. Instead of treating stablecoins as the sole answer, they are combining them with tokenized deposits and tokenized money market funds. The goal is to build a treasury environment where institutions can move between these instruments on one network rather than manage each product in isolation.
Banks are not waiting for a central bank solution
This approach also cuts across the policy debate in Europe over who should shape the future of digital money. European Central Bank President Christine Lagarde recently argued that euro stablecoins will not solve the deeper weaknesses in Europe’s financial markets, which she said mainly need more available cash and a truly safe, trusted asset.
Sygnum’s position partly aligns with that argument, but not with the remedy. Eichenberger agreed that stablecoins are not a silver bullet. Still, he pointed to a different path: commercial institutions are building practical systems now instead of waiting for central banks to issue a digital euro.
Public infrastructure with regulated access is gaining ground
The debate is not only about which assets to tokenize. It also concerns the networks that will process them. Eichenberger said many institutional conversations still default to private blockchains because they offer stronger control over data privacy and counterparties. Yet operators are increasingly looking at a different model — public infrastructure paired with permissioned, regulated access control.
That structure, he said, offers connectivity to the broader on-chain financial system without giving up supervision. It blends openness with traceability, which helps explain why fully private networks are no longer the only default option for banks exploring tokenized cash.
Swiss banking pilots offer a live example
Sygnum partnered late last year with UBS and PostFinance to test blockchain-based institutional payments on Ethereum. This year, it also joined UBS, PostFinance, Raiffeisen, Zürcher Kantonalbank, BCV and Swiss Stablecoin in a joint testing program for a Swiss franc-backed CHF stablecoin.
Elsewhere in Europe, competition is also taking shape. Qivalis, a consortium made up of 37 of the European Union’s largest banks, is aiming to launch a digital euro before the end of this year.
The Swiss effort gives the industry a real-world case study of what bank-run token networks look like when the issuing firms, the cash backing, and the supervisory bodies are all based in the same country. In Sygnum’s view, the market is no longer waiting for one winner in stablecoins. It is building shared rails for several regulated instruments at once.