Tokenovate CEO: Stablecoins' Real Win Is Settlement, Not Speed

Baker pointed to a structural problem inside post-trade systems. After a trade executes, cash and assets often move across different systems; collateral follows its own path, each maintaining a separate record. That fragmentation limits the value tokenized money can deliver in practice.

The solution, he said, requires consistency across the transaction, common standards, and a shared foundation to ease tokenization. "Many of the processes that sit behind settlement remain fragmented," Baker added.

For wholesale banks and trading firms, the implication is concrete. Every day that cash, assets, and collateral sit in separate ledgers adds a day of counterparty risk and locked-up capital. If tokenized money can compress settlement from T+2 or T+1 to near-instant, the savings show up directly in margin requirements and balance-sheet efficiency. Even a one-day reduction at scale can free billions in collateral across a large bank's trading book.

The EBA's working group plans to continue monitoring stablecoin and tokenized deposit development, with further guidance expected as adoption matures. Baker's argument suggests the real benchmark for that maturity is not how fast a payment clears but how quickly a trade truly settles.