The $133 Billion Question: Can Stablecoins Simplify Trade Settlement?

Some of the biggest names in the industry say stablecoins could soon change the way institutions settle transactions, solving the inefficiencies of the traditional financial system and opening the door to wider adoption.

This is the focus of the panel discussion at this conference Benzinga Future of Digital Assets ConferenceLeaders from finance and digital assets share their perspectives on regulation, liquidity, and the growing role of tokenized cash instruments.

Improving institutional efficiency through stablecoins

Colin ButlerGlobal Head of Institutional Capital polygon labhighlighted how stablecoins can improve institutional financing by replacing outdated processes. “What if you could rewire the global settlement system on a yield-generating institutional stablecoin and use it as a settlement token?” Butler said. He believes the ability to earn income during settlement delays could upend long-standing inefficiencies in traditional finance.

Existing settlement frameworks often suffer from lag and are costly. Andrew Murphylegal director Talosciting industry estimates that “the securities industry spends $133 billion annually on post-trade clearing and settlement alone.” By shortening the time between trades and settlements, stablecoins can reduce risk and streamline institutional operations.

Regulatory hurdles remain an obstacle

Despite their potential, stablecoins still face obstacles related to regulatory uncertainty. Panelists emphasized that establishing clear rules for stablecoin issuance, reserves, and auditing is critical for institutional adoption. Murphy stressed that the regulatory framework must address market structure issues without stifling technology. “You run the risk of over-regulating and taking away some of the benefits, especially if regulators don’t understand what the technology can do.”

Reba BeesonGeneral Counsel alpha pointechoed the need to work with regulators, noting that her firm works with clients to address compliance challenges. “It’s important to have guardrails in place that regulators understand while ensuring the technology works as intended,” Beeson said.

Retail Success and Institutional Opportunities

While institutions remain cautious, stablecoins have gained traction among retail users and merchants, driven by their ability to settle quickly. Butler pointed to recent activity by BlackRock, which tokenized its money market funds on multiple blockchains, including Polygon, as a sign of growing institutional interest.

Andrew ChupekHead of Digital Asset Innovation Northern Trust Americashighlighting the implications of building infrastructure that connects traditional and tokenized systems. “You can use one or the other, but if you don’t support both and integrate them, traditional customers don’t get those benefits,” Czupek said.

tipping point for adoption

The group is optimistic about the role of stablecoins in reshaping financial markets. While regulation remains a sticking point, attendees agreed that stablecoins can bridge the gap between traditional finance and blockchain technology.

Beeson explained that stablecoins will be successful when they solve clear use cases, such as cross-border transactions or liquidity needs.

Stablecoins are no longer an experimental concept but a practical solution with the potential to modernize global settlement systems. For agencies, the challenge is balancing regulatory requirements with the benefits of faster, more efficient processes.

Read next:

Photo by Colin Egretzky.