Stablecoins are not necessarily enemies of banks; they can be a money tree.

Authored by: James, Ethereum Foundation Ecosystem Lead

Translated by: Chopper, Foresight News

Last year, I first spoke with Tony McLaughlin shortly after he left Citibank and founded Ubyx. What impressed me most was: a person who worked at a top global bank for 20 years, when discussing public blockchains, held beliefs akin to native crypto enthusiasts, yet each argument was rooted in the real mechanisms of check clearing and correspondent banking.

As a seasoned payments industry professional, McLaughlin genuinely believes that the infrastructure he built in his career is about to be replaced.

McLaughlin isn’t the typical startup founder you might imagine. He’s a senior executive in payments, coming from one of the world’s largest banks. His approach to building a company reflects this: propose an idea, push it to market, and let the market decide what’s right.

How can stablecoins truly become everyday currency? The kind that appears in your bank account and is equivalent to cash.

His answer involves an extremely mundane infrastructure that most in crypto have never considered, and traditional banking hasn’t yet realized they need.

Build the system yourself, then walk away

To briefly outline McLaughlin’s career path—his background is crucial to this story.

He worked at Citibank for nearly 20 years, rising to Managing Director of Treasury and Trade Solutions, focusing on emerging payments. During this time, he became the principal designer of the Regulated Liability Network (RLN), arguably one of the most influential institutional-level blockchain concepts of the past five years.

RLN proposed a shared private ledger where central banks, commercial banks, and electronic money institutions could issue tokenized liabilities on the same platform—a response from regulated industries to public cryptocurrencies.

McLaughlin completed proof-of-concept work with the Federal Reserve and the UK Financial Conduct Authority, influencing the Monetary Authority of Singapore as well. The Bank for International Settlements (BIS) acknowledged RLN as an inspiration for its “Unified Ledger” concept. The Agora project, involving seven central banks and over 40 financial institutions, adopted a similar architecture. From any angle, this is heavyweight infrastructure.

Then, McLaughlin resigned and completely exited the project.

For years, he argued that private permissioned chains are the future of regulated currency. The technology itself isn’t the problem; the issue is that no one can solve the cold start problem.

You ask all the major banks and central banks worldwide to join a network that doesn’t exist yet, and no one wants to be the first mover. In a podcast, he called this the “bootstrap problem”: you need to start the network first, so others will use it, but no one is willing to do so because there’s no demand yet.

Public blockchains, however, have long solved this problem. They have users, liquidity, and developers. Cold start is a thing of the past.

The moment that finally made sense to him was the 2024 US elections. Observing political trends, he concluded: stablecoin regulation legislation is inevitable, meaning banks will eventually be allowed to operate on public blockchains because stablecoins are on public chains. The GENIUS Act, signed into law in July 2025, proved him right.

He describes this decision straightforwardly: “From that day, I decided I would never spend another second pushing private permissioned chains.”

He left Citibank and founded Ubyx in March 2025.

Banks’ misunderstanding of stablecoins

On March 3, 2026, President Trump publicly accused US banks of “undermining” the GENIUS Act and “hijacking” his crypto agenda. The core conflict was about profits.

Banks have been lobbying strongly against interest-bearing stablecoins, arguing they would drain deposits from traditional banking systems. The Bank of England is considering capping holdings of stablecoins for similar reasons.

This fear is real: the global stablecoin issuance has surpassed $300 billion. If this represents deposits leaving commercial bank balance sheets, the impact on credit capacity would be enormous.

But McLaughlin believes the question is asked the wrong way. Over the past year, he has consistently argued: stablecoins are not a threat to deposits—they are a revenue gift.

The root of this misconception is how people categorize this tool.

He says: “If regulators define stablecoins as ‘crypto assets pegged to fiat currency,’ I think they’re making a fundamental mistake. To me, that’s like saying ‘a check is a piece of paper linked to fiat currency.’”

What he means is, regulators are making a mistake they would never make with checks: they define the tool by its technology (cryptographic tokens), not by its actual function (a promise to pay face value). The technology is incidental; the promise is the core.

Writing “I owe you $10” on a slate, paper, or an Ethereum ERC-20 token is legally the same. What matters is who makes the promise and whether it’s enforceable.

In his framework, stablecoins are not a novel crypto-native product. They are a modern manifestation of one of the oldest tools in commercial law: negotiable instruments.

He compares them to the 1891 American Express travel check.

If you’re under 35, you might have never used or even heard of one. Before debit cards and ATMs became global, travel checks were the main way people carried cash abroad. Purchased in advance from American Express or banks, preloaded with a face value. Then spent anywhere in the world like cash, accepted by merchants or local banks because the clearing network guaranteed payment from the issuer.

I remember using them during backpacking trips in Asia—what a headache: queuing at bank counters, signing and re-signing, waiting for staff to call the issuer, poor exchange rates. No wonder they vanished almost overnight with the rise of bank cards.

But their attributes are identical to stablecoins: USD tools, non-bank issued, pre-funded, fully collateralized, interest-free, transferable to the bearer, redeemable at face value.

McLaughlin’s analogy is correct, but most listeners didn’t truly understand. Most can’t see the clearing problem of stablecoins because they’ve never used the tool that solved this issue back then. Travel checks have disappeared, and the underlying clearing infrastructure has become a forgotten history. So when McLaughlin says “stablecoins need what travel checks had,” the audience nods politely but doesn’t really grasp it.

Once you view the problem through this lens, the question isn’t “how do we protect deposits from stablecoin shocks?” but “how do we handle stablecoins as we did all other negotiable instruments over the past 200 years?”

That dull but critical part

Travel checks are accepted at face value worldwide not because of the paper itself, but because American Express, Visa, Thomas Cook built a clearing network that guaranteed merchants anywhere could exchange the check for cash at face value.

When that network disintegrated, the use of travel checks collapsed. Not because the tool failed, but because the channels failed.

Stablecoins are in exactly the same situation now. They can cross borders on public chains in seconds, but there’s no universal mechanism allowing you to redeem at face value through regulated financial institutions.

If you’re a stablecoin issuer, you must build your distribution network from scratch, negotiating bilateral agreements one by one. If you’re a bank accepting stablecoins for customers, you must negotiate with each issuer separately. The complexity grows geometrically.

McLaughlin’s favorite example is credit cards. Thousands of banks issue credit cards worldwide, which sounds chaotic. Yet you rarely walk into a store and hear “Sorry, we don’t accept your card.”

This fragmentation is invisible to users because Visa and Mastercard sit in the middle, enabling every card to be used anywhere.

Stablecoins are fragmented, but lack a clearing network. That’s the gap Ubyx aims to fill.

How does clearing work?

The mechanism design is very simple, and its difference from crypto exchanges is the core.

In exchanges, stablecoins are bought and sold at floating market prices, not guaranteed at face value. Exchanges are trading venues; demand drops, prices follow.

Ubyx doesn’t do that. It operates on a collection model, not a trading model. The goal is to redeem at face value, like depositing a check into a bank.

You don’t care who issued the check or which bank it’s from. You hand the check to the bank, and the bank credits your account at face value, with the backend settlement system collecting funds from the issuer bank. If the check bounces, the bank returns it to you—simple as that.

Ubyx’s process is similar:

• Customer deposits stablecoins (e.g., USDC) into the bank’s escrow wallet

• Bank submits the tokens to Ubyx

• Ubyx transfers to the issuer (e.g., Circle)

• The issuer verifies the tokens’ legitimacy and releases fiat from its pre-funded reserve

• USD flows back through Ubyx to the accepting bank, which credits the customer (usually after currency conversion minus FX spread)

• If the issuer fails to pay, the bank returns the tokens to the customer, like a bounced check. The bank bears no balance sheet risk during settlement.

McLaughlin describes this system as a “black box” with three modes:

• Stablecoin in, cash out (redemption)

• Cash in, stablecoin out (issuance)

• Stablecoin A in, stablecoin B out (swap)

It’s designed to be decoupled from issuers, public chains, and fiat currencies. The initial issuers include Paxos, Ripple, Agora, Transfero, Monerium, GMO Trust, BiLira, among others—covering USD, GBP, EUR, and emerging market currencies, across multiple public chains.

For banks, the technical integration cost is deliberately minimized. Most banks won’t build their own blockchain infrastructure, and even if they do, they still need to solve trust issues among banks.

$36 billion

This is where the narrative of deposit fears is reversed.

McLaughlin’s rough estimate: if the stablecoin market reaches $1 trillion (currently $300 billion and growing), and conservatively 0.5% of circulating tokens are redeemed daily, that’s about $1.8 trillion redeemed annually.

If banks charge 100 basis points fee plus another 100 basis points FX spread, annual revenue could reach $36 billion.

These are his assumptions, and the calculations are roughly correct. For any bank, the question is simply: how much do you want to earn?

For non-US banks, this economic incentive is especially attractive. Every dollar entering European or Asian banking systems and converted into local currency via stablecoins is pure FX income for the accepting bank. FX business is almost “super profit” for banks.

Over the past year, McLaughlin has called foreign stablecoins a “gift” in every setting.

This model’s alignment with central bank goals makes it even more compelling than just revenue.

When stablecoins are redeemed through regulated entities into escrow wallets, they become visible to tax authorities, undergo AML/KYC checks, and are converted into local currency on the bank’s balance sheet. Central banks gain compliance and monetary transparency, commercial banks earn fees and expand their assets, and customers get face-value exchanges.

McLaughlin’s advice to bank CEOs is very specific: “Accept first, issue later. In stablecoins, collecting is better than issuing. Why? Because you can earn a lot just by ‘collecting.’”

The most straightforward business logic is accepting and exchanging third-party stablecoins. Once a shared acceptance network is built, any bank can clear any stablecoin just like settling Visa transactions, drastically lowering issuance barriers.

At that point, issuing your own stablecoin will be as easy as issuing a credit card. No need to build an acceptance network—just connect.

Who agrees with this?

Ubyx’s shareholder list is revealing, as the names show who endorses it.

Ubyx completed a $10 million seed round in June 2025, led by Galaxy Ventures. The other investors form a “dream team” rarely seen together: Peter Thiel’s Founders Fund, Coinbase Ventures, VanEck, LayerZero.

Silicon Valley libertarian capital, top crypto exchanges, and major traditional asset managers are all investing in stablecoin clearing infrastructure. Several investors are also network participants: Paxos and Monerium are both investors and issuers within the network; Payoneer and Boku are strategic partners.

This “investors-as-network-users” structure is deliberate. McLaughlin explicitly compares it to the early equity structure of Visa and Mastercard: banks using the network are the owners of the network.

In January 2026, Barclays Bank made a strategic investment. It’s the second-largest bank in the UK and its first-ever investment in a stablecoin company. Ryan Hayward, head of digital assets and strategic investments at Barclays, said: “Interoperability is key to unlocking the full potential of digital assets.”

Implying: one of Europe’s most systemically important banks understands the logic of stablecoin clearing and is voting with its money.

A month later, Arab Bank’s fintech accelerator AB Xelerate also made a strategic investment. Now, US VCs, European banks, and Middle Eastern financial infrastructure all bet on the same direction.

What could go wrong?

Circle launched its own Circle Payments Network in mid-2025, providing proprietary infrastructure for USDC settlement. Circle has enough scale to build a distribution system on its own.

The market question is: will it be a single-issuer network (Circle’s approach) or a multi-issuer clearing system (Ubyx’s approach)? McLaughlin argues that history favors a diversified clearing model, but Circle’s first-mover advantage and market share are real.

The profit battle between banks and crypto companies remains unresolved. The OCC’s proposed rules include a rebuttable presumption that opposes stablecoin profit mechanisms.

If profits are banned, banks can breathe easier because stablecoins are less attractive than savings accounts for cash holders. But this also limits stablecoins’ use to payments and settlement, constraining market size and slowing Ubyx’s growth.

If profits are allowed, the stablecoin market could explode, directly competing with deposits, money market funds, and Treasuries for idle funds. Banks have every reason to rapidly build infrastructure—to defend (prevent customer loss) and to attack (capture FX and fee income).

Ubyx commits to open-source rules and ultimately DAO governance via tokens. This aligns with its connected decentralized network, but for regulated financial markets infrastructure, it remains an untested model.

Summary

McLaughlin’s career began with defending fiat against crypto challenges. The second phase was building private chains for banks. The third phase led him to conclude: private chains cannot achieve mass adoption.

The turning point was his view on where funds are stored. On public chains, in wallets, through a foundational settlement infrastructure, every regulated stablecoin can be as reliable and harmless as a check.

He believes the key to the entire transition is one sentence: “Banks can treat stablecoins like checks.”

If an authority figure states this, every bank and fintech worldwide will immediately know what to do. Ubyx bets that someone will say it soon.