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Next Gen of Payments Could Leave ACH System Behind, Bank CEO Cautions

NEW YORK–The next generation of payments could leave the Automated Clearing House (ACH) system behind as stablecoins and tokenized deposits move into the banking core, according to one bank CEO.

Custodia Bank CEO Caitlin Long said during a discussion with TheStreet Roundtable host Scott Melker that the “tokenized dollars are going to be big. Yes, there’s a distinction between tokenized bank deposits and stablecoins. Yes, right now, all the activity is in stablecoins, but we’re going to link the two in a safe and sound way.”

During the discussion, Long cited Citi’s upgraded forecast for the sector, which now projects between $3 trillion and $4 trillion in stablecoins outstanding by 2030, according to Yahoo Finance, which noted Long believes even that range is far too conservative.

“Those numbers are still too low,” she said. “I think they’re way too low.”

According to Long, the innovation lies in embedding blockchain technology directly into the banking infrastructure rather than layering it on top, Yahoo Finance said.

Not a ‘Bolt-On’

“We’re not talking about a bolt-on. We’re not talking about sort of a side idea. This goes straight into the core,” she said during the discussion. “If you get those primitives inside the banks themselves, then the banks can then go build on those primitives.”

Long believes tokenization will soon extend beyond deposits, Yahoo Finance reported. 

“When Paul Atkins says that we’re now going to start tokenizing securities… I think the ACH system within five years is essentially just going to die on the vine because people will just be walking away from it,” Long said.

Unfolding ‘Quietly’

According to Yahoo Finance, Long believes that the transformation toward blockchain-based payments will unfold quietly in the background. Most users, she said, won’t even realize that their transactions are being processed on a blockchain network.

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