Digital Money Moving Closer to Core Market Infrastructure

Traditional wholesale markets already rely on electronic payment and settlement systems, but tokenisation introduces a different architecture in which money and financial assets can operate on compatible digital infrastructure. Tokenised commercial bank deposits, wholesale central bank money and regulated stablecoins represent different approaches, while institutional experimentation is testing how each can support broader market activity. Project Agorá, led by the Bank for International Settlements (BIS), brought together seven central banks and more than 40 regulated financial institutions to explore programmable wholesale payments using tokenised deposits and central bank reserves. This progression is bringing digital money into a broader range of institutional workflows:

• Securities Settlement: Project Acacia tested 20 wholesale tokenised-asset market use cases across areas including fixed income, managed funds, repo, structured products and private markets.
• Treasury and Liquidity: Swift is working with 17 banks across six continents to test tokenised deposits for cross-border payments and more efficient liquidity management.
• Repo and Collateral: Tokenised money can work alongside tokenised assets and collateral, creating opportunities for more integrated transaction structures across wholesale markets.
• Conditional Payments: Programmable transactions can link the movement of digital money to predefined contractual or settlement conditions.

The development is therefore extending digital money beyond conventional payment activity and toward a broader role within financial-market infrastructure. As these models develop, interoperability, liquidity management and the connection between new tokenised systems and established settlement frameworks will remain important to how widely they can be used.

Interoperability Becoming Central to Wholesale Settlement

The expansion of tokenised financial markets is also exposing a key challenge: different forms of money and financial infrastructure need to work together without fragmenting liquidity. The Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre found through Project Acacia that interoperability, liquidity fragmentation, legal uncertainty and coordination remain important considerations across wholesale tokenisation use cases. These issues become more significant as institutions move beyond individual transactions and consider how tokenised money can connect with existing payment, settlement and banking systems.

• Interoperable Infrastructure: Different ledgers, payment systems and settlement platforms need compatible mechanisms for assets and money to move across networks.
• Liquidity Management: Fragmented pools of tokenised money could make liquidity harder to manage unless institutions can transfer and use settlement assets efficiently.
• Legal Certainty: Different forms of tokenised deposits, central bank money and stablecoins carry different legal and risk characteristics that influence their suitability for wholesale markets.
• Operational Resilience: New programmable infrastructures must operate alongside established financial systems while maintaining reliability, security and settlement integrity.

Institutional Experiments Expanding Across Market Functions

The development of digital money is therefore being tested across a wider range of wholesale activities rather than being limited to cross-border payments. Project Acacia examined 20 use cases spanning fixed income, managed funds, repo, structured products, private markets, carbon credits and trade payables, illustrating how tokenised money can become relevant wherever financial assets and settlement processes interact. At the same time, institutional pilots are testing different monetary forms rather than assuming a single model will dominate. Tokenised commercial bank deposits can provide a deposit-based settlement asset, wholesale central bank money can maintain direct central-bank settlement, while regulated stablecoins offer another structure with different liquidity and risk considerations.

• Wholesale Payments: Programmable settlement can allow payment instructions and transaction conditions to operate within the same digital workflow.
• Tokenised Securities: Money and securities can potentially be represented on compatible infrastructures, bringing delivery and payment processes closer together.
• Liquidity Transfers: Tokenised deposits can support movement of funds across institutional workflows where conventional settlement arrangements may involve additional intermediaries.
• Market Connectivity: Initiatives connecting tokenised asset platforms with established central-bank settlement infrastructure are testing how new and existing systems can operate together.

This experimentation suggests that digital money is becoming part of a broader infrastructure question for wholesale finance. The potential value lies not only in moving funds faster, but in making settlement more closely connected to assets, contractual conditions and institutional workflows.

As wholesale markets test tokenised forms of money, the longer-term question is how these systems can scale while maintaining the trust, liquidity and settlement certainty expected across financial markets. Central banks and financial institutions are therefore examining not only technical capabilities but also the governance and risk frameworks needed to support wider institutional use.

• Settlement Confidence: Central bank money remains important for final settlement where institutions require a trusted settlement asset.
• Liquidity Integration: Tokenised money needs to connect efficiently with existing sources of wholesale liquidity rather than creating isolated pools.
• Common Standards: Shared technical, legal and operational standards can reduce fragmentation as different platforms develop.

The direction of travel suggests that digital money is becoming increasingly connected to the wider architecture of wholesale finance, with interoperability and institutional trust likely to determine where adoption gains lasting traction. These developments also connect with the emergence of new mechanisms for funding businesses and investment, as explored in digital settlement infrastructure.

References

1. Bank for International Settlements – Project Agorá – 2025
2. Reserve Bank of Australia and Digital Finance Cooperative Research Centre – Project Acacia: Exploring the Role of Digital Money in Wholesale Tokenised Asset Markets – 2026
3. Swift – Tokenised Deposits and Blockchain Ledger Initiative – 2026
4. European Central Bank – Pontes – 2026

The post Digital Money Finds New Uses in Wholesale Finance Markets first appeared on World Finance Informs.

The post Stripe to Acquire Parafin to Expand Embedded Finance first appeared on World Finance Informs.

The post Settlement Hours Evolving Toward More Continuous Market first appeared on World Finance Informs.

Trade-Date Processing Becoming More Critical

The move to faster settlement is therefore putting pressure on the processes that prepare a trade for settlement rather than on settlement itself. In Europe, the planned transition to T+1 on 11 October 2027 is already driving changes to allocation and confirmation practices, with ESMA proposing electronic, standardised communication and earlier completion of these processes. AFME’s roadmap similarly calls for standardised electronic exchange of allocations and confirmations and intraday transmission, reflecting the need to move more post-trade activity into the trade date.

The effect extends across the transaction chain because each stage depends on information generated earlier. An incorrect allocation can delay confirmation, an unmatched trade can complicate settlement instructions, and incomplete data can leave less time for operational teams to intervene. As the move toward faster settlement progresses, firms therefore have greater incentive to reduce manual handoffs, improve data quality and identify discrepancies while there is still time to act.

T+1 compresses the upstream post-trade window, making timely processing and accurate settlement data more important.

The U.S. transition provides practical evidence of how firms can adapt to a shorter cycle. Industry data showed nearly 95% of transactions met the affirmation criteria by the 9:00 p.m. ET trade-date cutoff after the 2024 transition, compared with 73% at the end of January 2024. The experience does not remove the operational challenges of shorter settlement, but it demonstrates why trade-date processing and automation have become central to readiness. That creates a natural bridge to corporate-event processing within compressed settlement timelines.

Automation Moving More Work into the Trade Date

The post Faster Settlement Bringing New Pressure to Trade Processing first appeared on World Finance Informs.

Tokenised deposits are ordinary bank deposits represented on blockchain infrastructure. Unlike privately issued stablecoins, they retain their full legal status as commercial-bank money, meaning funds remain within the regulated banking system. The critical advance demonstrated by this project is interoperability. Rather than each bank developing an isolated blockchain system, a limitation that had stalled interbank digital-money transfers for years, the participating institutions operated through a shared platform that allowed tokenised deposits to flow seamlessly between them.

The completed transactions included two remortgage completions and one simulated consumer marketplace purchase. In the remortgage transactions, Lloyds, NatWest and Barclays used tokenised deposits to automate fund releases. Once each property transaction reached completion, locked funds were released automatically without manual intervention, demonstrating the potential of programmable money to streamline settlement in complex financial processes.

Live Transactions Demonstrate Programmable Payments Across Banks

The consumer marketplace transaction involved a group of banks including HSBC and tested a scenario modelled on an online purchase. Programmable deposits allowed funds to be held securely in the buyer’s account and released to the seller only after delivery was verified. It is important to note that no actual goods changed hands during this test, the transaction was a simulation designed to validate the infrastructure and the programmability features underpinning tokenised deposits.

These interbank payments represent a significant operational proof point. The ability to programme conditions into tokenised deposits, releasing funds only when predefined criteria are met, has direct implications for fraud reduction, settlement efficiency and the broader architecture of digital finance. For payments professionals and financial-infrastructure executives, the project demonstrates that blockchain banking can operate across institutional boundaries in a live environment, not merely within a single bank’s internal systems.

Next Steps Toward Production and Digital Bond Issuance

With live transactions now completed, the participating banks are moving toward the next phase of development. The project plans to establish a dedicated company and develop a formal rulebook and governance framework to support the transition from pilot stage into full production. These steps are designed to provide the regulatory clarity and operational standards required for broader adoption of tokenised deposits across the banking sector.

Looking further ahead, the consortium of banks intends to issue three digital bonds in the first quarter of 2027. These bonds would be tradeable and settlable using tokenised deposits, extending the infrastructure’s utility from interbank payments into capital markets. That phase of work remains in the planning stage and has not yet been executed, but it signals the direction in which participating institutions aim to take this shared digital finance platform.

The post Tokenised Deposits Move into Live Interbank Payments first appeared on World Finance Informs.

Fast Payments Increasing Frequency While Cards Retain Established Roles

The divergence becomes clearer when transaction frequency is considered alongside the underlying payment method. BIS data show that fast payments are increasingly being used for small-value transactions in both advanced and emerging economies, giving these systems a growing role in frequent retail and account-to-account payments. In emerging and developing economies, fast payments accounted for a substantially larger share of cashless transaction volume than in advanced economies, reflecting differences in payment infrastructure, adoption and use cases.

At the same time, instant payments and card payments can continue expanding within the same market because they serve different transaction needs. Cards remain deeply embedded in retail payment activity across mature digital markets, while instant-payment systems can capture payments where immediate account-to-account settlement, mobile interfaces or continuous availability are more relevant. ECB data illustrate this coexistence: cards accounted for 57% of euro-area non-cash payment transactions in the second half of 2025, even as instant credit transfers continued to increase within the broader credit-transfer category.

This also highlights why transaction volume cannot be viewed independently from transaction value. A payment system may process a very large number of relatively small transactions without carrying the majority of the financial value moving through an economy. As instant payments and card payments continue developing across different use cases, the global payment ecosystem is therefore becoming more differentiated by transaction frequency, value and purpose rather than converging on a single dominant payment model.

Transaction Volume and Value Revealing Different Payment Profiles

The divergence between instant payments and card payments becomes clearer when transaction volume is examined alongside transaction value. BIS data show that fast payments are increasingly used for small-value transactions across both advanced economies and emerging market and developing economies, while cards continue to account for a large proportion of frequent retail payments in advanced economies. The underlying difference is therefore not simply how many transactions each rail processes, but the types and values of payments flowing through them. A growing number of instant payments can reflect frequent, lower-value transactions without corresponding to an equivalent share of overall payment value.

The euro area provides evidence of this separation between frequency and financial value. In the second half of 2025, card payments accounted for 57% of non-cash transactions, while credit transfers accounted for 21%. Yet credit transfers represented 92% of the total value of non-cash payments because higher-value payments are generally conducted through that channel. This demonstrates why instant payments and card payments should be assessed through both transaction frequency and value rather than through volume alone.

Global Payment Activity Showing Increasingly Different Transaction Characteristics

The contrast also reflects different payment behaviours across markets. BIS research shows that cards remain the main driver of cashless-payment growth in advanced economies, while credit transfers, supported increasingly by fast-payment systems, are growing more rapidly in emerging and developing economies. At the same time, consumer behaviour can remain relatively stable even as new payment infrastructure expands. The Federal Reserve’s latest U.S. consumer-payment research found that credit and debit cards together continued to account for two-thirds of consumer payments in 2025, illustrating the persistence of established card usage within a changing digital ecosystem.

instant payments and card payments are therefore developing alongside one another through different combinations of frequency, value and use case. For the wider shift toward continuous digital settlement, this distinction connects with the growing macro-level role of fast payment systems.

Key Takeaway: Payment systems are developing different transaction profiles globally, with card use remaining prominent in advanced economies while fast payments account for a larger share of transaction activity in emerging and developing economies.

The post Instant Payments and Card Payments Showing Diverging Transaction Patterns first appeared on World Finance Informs.

Pricing can differ between the payment rail, participating financial institutions and the merchant-facing service. A rail may charge participating institutions while a payment service provider separately prices the merchant service. In other models, merchants may face no direct charge because operating costs are supported through subsidies, participant fees or other revenue streams. This makes merchant fees part of a wider economic model rather than a standalone transaction cost.

Pricing Models Balancing Merchant Access and Rail Sustainability

Global fast-payment systems use zero-fee arrangements, regulated charges and selective pricing for particular transactions. Research from the Bank for International Settlements shows that pricing decisions can influence adoption incentives and the financial sustainability of fast-payment systems. Where transaction charges are kept very low, providers may need other revenue sources or financial support to fund infrastructure, security and ongoing development.

The issue is therefore less about whether instant payments should be free and more about how pricing affects the wider ecosystem. A fee that supports merchant acceptance still needs to fit within a sustainable operating model. The relationship between these factors also provides a natural bridge to transaction patterns across instant and card payments.

Key Takeaway: Merchant pricing is one part of a wider fast-payment economic model connecting merchant affordability, provider incentives and the costs of operating the payment rail.

Merchant Pricing Models Creating Different Economic Trade-Offs

The economics of instant-payment rails differ significantly depending on how costs are distributed among merchants, payment service providers and other participants. merchant fees can be set at zero, structured as a percentage of transaction value, capped at a defined amount, or applied only to specific transaction categories. These approaches can influence how attractive instant payments are for merchants while also affecting the revenue available to providers supporting the payment service.

Zero-fee models can encourage merchant acceptance, but they do not remove the underlying cost of operating the payment ecosystem. Infrastructure, connectivity, fraud controls, cybersecurity, compliance and system development still require funding. Research from the Bank for International Settlements notes that where fast-payment transactions are offered without direct fees, alternative revenue sources or external support may be required to maintain financial sustainability. This makes the structure of merchant fees relevant not only to merchants but also to the longer-term economics of the payment rail.

Merchant Charges Interacting with Payment Service Economics

The relationship between merchant fees and payment-system costs also depends on where the charge is applied. A fee imposed at the rail level may be paid by participating financial institutions rather than directly by merchants, while merchant-facing providers can add their own charges for processing, integration or related services. As a result, the headline price of an instant-payment transaction does not necessarily represent the total cost of acceptance for a business.

Recent pricing developments illustrate how different models are emerging. Some fast-payment systems continue to support free or very low-cost merchant transactions, while others are introducing selective charges for particular categories. The underlying economic question is whether pricing can maintain merchant access while giving payment providers sufficient incentives to invest in secure, resilient infrastructure and additional services.

For merchants, the calculation can also extend beyond the transaction fee itself. Faster settlement may affect the timing of funds availability, while digital reconciliation and payment processing can influence operating costs. The economics therefore depend on how the instant-payment service combines its direct price with the wider value and costs associated with accepting the rail.

Merchant Pricing Becoming Part of Long-Term Instant Payment Economics

The economics of instant-payment rails increasingly depend on how costs are distributed across merchants, payment providers and other participants. merchant fees can influence acceptance decisions, while the absence of direct charges can shift funding requirements toward subsidies, participant fees or alternative revenue streams.

The broader issue is finding pricing structures that support accessible payment acceptance without weakening the financial sustainability of the underlying service. As instant payments expand, providers also need to account for infrastructure, security, fraud management, system resilience and ongoing development.

For merchants, the cost calculation extends beyond the headline transaction fee and can include settlement, processing and operational considerations. This makes pricing an important part of how instant-payment systems develop commercially, while different markets continue to use different models according to their regulatory and business structures.

For World Finance Informs, the development highlights how the economics of payment acceptance are becoming an increasingly important part of the wider real-time payments landscape.

The post Merchant Fees Reshaping the Economics of Instant Payment Rails first appeared on World Finance Informs.

The post Verification of Payee Becoming Part of the Instant Payment Journey first appeared on World Finance Informs.

This is giving digital euro payment infrastructure a more concrete role in the evolution of European digital payments. The project is no longer centred only on whether a central bank digital currency could work technically. It is increasingly concerned with how a digital form of central-bank money could operate alongside commercial banks, payment service providers and existing payment systems.

The Digital Euro is Moving from Design Toward Implementation

The current roadmap provides a clearer indication of how the project could develop. The ECB plans a 12-month pilot in the second half of 2027, allowing selected payment service providers, merchants and Eurosystem staff to test the digital euro in practical payment scenarios. The ECB currently aims to be ready for a potential first issuance in 2029, provided the required legislation is adopted. These milestones remain conditional rather than representing a confirmed launch date.

The development is therefore moving beyond technical theory. A pilot can test how the proposed system performs in everyday situations, including person-to-person and in-store payments, while also providing information about the operational requirements of participating payment providers.

For digital euro payment infrastructure, this stage is important because implementation depends on more than the central bank’s own technology. Distribution, authentication, merchant integration and user access all require participation from the wider financial ecosystem.

Private-Sector Participation is Expanding

The growing involvement of payment service providers provides another indication of this transition. The ECB received more than 50 applications from PSPs seeking to participate in the pilot and selected 36 providers in July 2026. The selected institutions represent different types of payment providers and markets across the euro area.

This model places commercial financial institutions between the Eurosystem’s underlying infrastructure and many end users. It also means the practical development of the digital euro will depend on how effectively central-bank infrastructure can connect with existing banking and payment environments.

The approach is significant beyond the euro area because it offers another model for introducing central-bank money into an increasingly digital payment ecosystem. Rather than creating a completely separate consumer environment, the proposed system is being developed with existing financial intermediaries and payment services in mind.

Digital euro payment infrastructure is therefore emerging as a broader ecosystem proposition involving central-bank settlement, private-sector distribution and merchant acceptance.

Key Takeaway: The digital euro is progressing from research toward practical ecosystem testing, with payment providers increasingly involved in preparing the infrastructure required for potential deployment.

The significance of the project is therefore shifting from whether digital central-bank money is technically possible toward how it could function within an established payment ecosystem. Digital euro payment infrastructure is becoming a practical development programme involving technology, regulation and private-sector participation rather than a purely conceptual CBDC initiative.

Digital Euro Design is Adding New Payment Infrastructure

The development of the digital euro is also raising a broader question about how central-bank money can fit into an increasingly digital payment ecosystem. Unlike conventional account-based payments, which depend on commercial-bank deposits, the proposed digital euro would represent a digital form of central-bank money distributed through payment service providers. Its role would therefore be different from simply creating another instant-payment option.

This makes digital euro payment infrastructure relevant to the wider structure of digital finance. The proposed model is designed to operate alongside existing payment instruments rather than replace every current payment method. The ECB has also stated that the digital euro would use a centralised settlement platform, while incorporating design principles intended to support resilience and efficiency.

Public Digital Money is Entering a Private Payment Ecosystem

The digital euro is being designed around cooperation between the Eurosystem and private payment providers. Banks and other participating PSPs would provide digital-euro services to end users, while the underlying settlement infrastructure would remain part of the Eurosystem framework. This creates a model in which central-bank money can be used through familiar banking and payment relationships rather than through an entirely separate consumer ecosystem.

That distinction matters because digital payments are already highly developed across the euro area. Consumers can use cards, bank transfers, instant payments and other digital payment services, while merchants already operate through established acquiring and acceptance infrastructure. The potential role of the digital euro is therefore not simply to digitise payments, but to introduce another form of money into an existing digital environment.

For digital euro payment infrastructure, interoperability will consequently be important. The system needs to connect effectively with banks, payment providers and merchant environments while preserving clear distinctions between central-bank money and commercial-bank deposits.

Privacy and Offline Functionality are Shaping the Design

Privacy is another major design consideration. The ECB has said that the proposed digital euro architecture is intended to minimise the personal transaction data available to the Eurosystem, while offline functionality is designed to provide a higher degree of privacy for certain payments. These features are being developed as part of the system design rather than as characteristics of an already deployed payment network.

Offline payments also introduce a different resilience model. A digital payment that can function with limited connectivity could be useful in situations where network access is temporarily unavailable. This could expand the range of environments in which digital central-bank money can operate while reducing dependence on continuous online connectivity.

The design also includes measures intended to limit potential disruption to the banking system. Proposed holding limits and mechanisms such as a reverse waterfall are intended to reduce the risk of large-scale movement of deposits into digital euros. These safeguards reflect the fact that introducing central-bank money into retail digital payments can have implications beyond payment convenience.

Digital Euro Design is Balancing New Capability With Existing Infrastructure

The resulting architecture is therefore being shaped around several objectives at once: providing a public form of digital money, maintaining privacy, supporting online and offline payments, integrating private-sector distribution and limiting potential effects on bank funding.

This makes the digital euro different from a standalone payment application. Digital euro payment infrastructure is being designed as a layer that could sit alongside existing banking and payment systems while giving users another way to hold and transfer digital central-bank money.

Key Takeaway: The digital euro is being designed as an additional public-money layer within an existing private payment ecosystem, with privacy, resilience and banking-system safeguards built into the proposed architecture.

The broader significance is therefore architectural rather than simply transactional. Digital euro payment infrastructure could introduce central-bank money into everyday digital payments while remaining connected to the banks, PSPs and merchant systems that already support the European payment ecosystem.

Digital Euro Development is Becoming a Broader Banking Infrastructure Question

The digital euro is developing as more than a new consumer payment instrument. Its proposed architecture brings central-bank money into an ecosystem already shaped by commercial-bank deposits, instant payments, cards and other digital payment services. The challenge is therefore to create a system that adds new functionality without disrupting the infrastructure and intermediaries that already support everyday payments.

This makes digital euro payment infrastructure increasingly relevant to questions around interoperability, privacy, resilience and the role of payment service providers. Its eventual impact will depend not only on the technology itself, but also on how effectively it integrates with existing financial infrastructure and how consumers, merchants and banks use it.

As development moves toward the planned pilot, digital euro payment infrastructure is becoming a practical test of how central-bank money can participate in a highly digital payment ecosystem. The longer-term significance will depend on the final regulatory framework, market adoption and the ability of the system to coexist with existing payment networks.

The post Digital Euro Development Adding a New Layer to Digital Payments first appeared on World Finance Informs.

This is giving open banking account to account payments a broader role in digital banking. Rather than requiring customers to enter card details or move between separate banking and merchant environments, account-to-account payments can allow funds to move directly from a bank account through an authorised digital interface. The underlying bank account remains central, but the customer experience can increasingly be delivered through another financial or commercial service.

Account-to-Account Payments are Moving into Digital Experiences

Traditional digital banking generally keeps payment activity within the bank’s own channels. Open banking changes this relationship by allowing regulated third parties to connect to bank accounts through APIs, subject to customer permission and applicable controls. This creates a more open payment environment in which banks provide the underlying account and payment infrastructure while other providers can build services around it.

The distinction becomes particularly important for account-to-account payments. Instead of using a card as the intermediary between a customer and merchant, a customer can authorise a payment directly from their bank account. This can create opportunities for pay-by-bank services, digital marketplaces, bill payments and other account-based payment experiences.

The development is no longer limited to early-stage experimentation. Open Banking Limited reported that UK open-banking payments reached 351 million transactions in 2025, an increase of 57% from the previous year. By July 2026, the UK’s major high-street banks had collectively processed more than one billion open-banking payments since the launch of the framework.

These figures come from one market, but they illustrate the broader shift toward bank-account connectivity as a payment capability. Open banking account to account payments can increasingly sit within digital journeys that do not require the customer to initiate the transaction directly through their bank’s interface.

Open Banking is Connecting Banks with the Wider Digital Economy

The significance of open banking extends beyond payment initiation. APIs can allow financial information and payment capabilities to become integrated into applications operated by fintechs, merchants and other regulated service providers. The Bank for International Settlements describes open finance as a development that can break down data silos and support new financial services, while emphasising that standardised protocols and interoperability are important to achieving those benefits. (bis.org)

This creates a different competitive structure around banking. Banks continue to provide regulated accounts and payment infrastructure, while third parties can develop customer experiences on top of those capabilities. Consumers can therefore encounter banking functions within commerce, financial-management and other digital applications rather than exclusively inside a bank-owned channel.

Open banking account to account payments are particularly relevant to this model because payment initiation can become embedded directly into the service where the customer is already making a purchase or managing a financial obligation.

Key Takeaway: Rising payment volumes and cumulative transaction milestones show that open banking is moving from an emerging connectivity model toward established account-to-account payment infrastructure.

The wider development is changing the role of the bank account within digital finance. Open banking account to account payments can connect existing banking infrastructure with merchant, fintech and financial-service experiences, bringing direct bank-account payments closer to the centre of digital commerce.

The post Open Banking Moves Account to Account Payments Closer to Digital Banking. first appeared on World Finance Informs.