X Change: Stablecoins, Tokenised Deposits & Banking Infrastructure

Citi connects banking infrastructure with Coinbase, Mastercard expands its stablecoin rails, the Federal Reserve proposes issuer rules and tokenised deposits continue to scale.

X Change is BetterX and AUDX’s weekly briefing on digital assets, stablecoins, payments and financial infrastructure.

This week, one theme stands out: the boundaries between traditional banking and digital money are becoming increasingly difficult to separate.

Citi is connecting its banking infrastructure with Coinbase to make moving between fiat and stablecoins easier for businesses. Mastercard is making another stablecoin available through its payments infrastructure. Citi’s own tokenised-deposit network has expanded into seven markets.

At the same time, the Federal Reserve is developing the regulatory framework that would apply to payment stablecoin issuers under its supervision, while traditional payment networks continue to become faster and more connected.

Taken together, these developments point towards a financial system where stablecoins, tokenised deposits and traditional bank money increasingly operate alongside one another.

Here’s what caught our attention.

💳 Payments Watch

Citi and Coinbase connect stablecoins with traditional banking infrastructure

Citi and Coinbase have expanded their partnership with two initiatives designed to make it easier for businesses to move between traditional bank money and stablecoins.

Coinbase has selected Citi’s Virtual Account Wallet to power Coinbase Virtual Accounts.

The service will provide Coinbase payments customers with bank-account-like functionality, including the ability to accept, hold and pay funds. Incoming fiat can be automatically converted into stablecoins.

In the other direction, Spring by Citi will allow Citi’s institutional clients to accept stablecoin payments at checkout using Coinbase Payments.

The digital currency can be automatically converted into fiat, with Citi settling the funds as the bank of record.

Importantly, Citi says this allows merchants to accept stablecoin payments without needing to hold, custody or directly manage the digital assets themselves.

The initiatives will launch first in the United States.

Why it matters

This addresses one of the more practical barriers to business adoption of stablecoins.

A business may see advantages in accepting a stablecoin payment without wanting to manage wallets, custody digital assets, change its treasury policy or introduce an entirely separate payment infrastructure.

The Citi-Coinbase model begins to abstract some of that complexity away.

For the merchant, the transaction can still ultimately settle into fiat. Behind the scenes, however, stablecoins can provide another rail through which the payment moves.

That distinction could be important for broader adoption: businesses may eventually use stablecoin infrastructure without necessarily thinking of themselves as stablecoin users.

Source: Citi, 28 September 2026.

🏦 Banking & Digital Money

Citi Token Services expands into Japan and the UAE

Citi has expanded Citi Token Services into Japan and the United Arab Emirates, taking the service to seven markets:

United States · Ireland · Hong Kong · Singapore · United Kingdom · Japan · UAE

Citi Token Services uses a private permissioned blockchain to enable institutional clients to move funds across Citi’s network without being constrained by traditional banking cut-off times or holiday calendars.

Citi says the infrastructure can support payments, liquidity and collateral requirements and enable near-instant movement of funds across its network.

The expansion means clients with accounts in Japan and the UAE can transfer funds to and from previously enabled Citi Token Services locations.

Citi says the service is already processing billions of dollars in transactions.

Why it matters

Stablecoins aren't the only form of digital money being developed.

Banks are simultaneously building tokenised commercial-bank deposits that provide some of the same benefits including 24/7 movement and programmable settlement within existing banking relationships.

Citi's expansion is particularly interesting because it is no longer an isolated proof of concept.

The network is now live across seven major financial centres.

That creates an increasingly important question for digital finance:

Which transactions are better suited to stablecoins, and which are better suited to tokenised bank deposits?

The answer may ultimately be different depending on whether value needs to move within a banking network, across different financial institutions or onto public blockchain infrastructure.

Source: Citi, 28 September 2026.

🪙 Stablecoin Infrastructure

Mastercard brings OpenUSD into its payments infrastructure through BVNK

Mastercard announced that OpenUSD will become available through BVNK, the stablecoin infrastructure business Mastercard acquired earlier this year.

Financial institutions, distributors and enterprises will be able to access OpenUSD through BVNK alongside fiat currencies and other stablecoins.

Mastercard describes the strategy as part of a move towards what it calls a “multi-money” financial system, where bank deposits, card networks, real-time payments, digital assets and stablecoins increasingly coexist within the same financial infrastructure.

Why it matters

The important development here isn't simply the availability of another stablecoin. It's the infrastructure surrounding it.

For businesses, adding a new form of money can easily create additional complexity: another provider, another account, another treasury workflow and another integration.

Payments companies are increasingly trying to remove that complexity by providing infrastructure capable of handling multiple forms of money through the same operating environment.

That could ultimately matter more for adoption than the number of stablecoins available.

Source: Mastercard, 30 September 2026.

🏛️ Regulation

Federal Reserve proposes framework for supervised payment stablecoin issuers

The Federal Reserve has requested public comment on two proposals implementing its responsibilities under the GENIUS Act.

The proposals would establish a regulatory framework for payment stablecoin issuers supervised by the Federal Reserve.

Among other requirements, the proposed framework would require payment stablecoins to be fully backed by permitted reserve assets, including certain short-term Treasury securities and other high-quality liquid assets.

It would also establish requirements covering capital, risk management and the safekeeping of reserve assets.

A separate proposal establishes an application process for Federal Reserve-supervised banks seeking approval to issue payment stablecoins.

These are proposed rules, not final regulations, and remain subject to public consultation.

Why it matters

Stablecoin regulation is increasingly moving from broad legislative principles into the detailed rules institutions would actually need to operate under.

Questions such as:

• What can reserves consist of?

• How much capital should an issuer hold?

• How should reserve assets be safeguarded?

• What does a bank need to demonstrate before it can issue a payment stablecoin?

These details will ultimately influence which institutions enter the market and how bank-issued stablecoins develop alongside non-bank issuers.

Source: Federal Reserve, 24 September 2026.

🌐 Interoperability

Banks are trying to connect tokenised deposits with existing payment infrastructure

Another development this week came from Oracle, which announced an integration designed to connect banks’ existing payment systems with Swift’s blockchain-based ledger.

The objective is to allow financial institutions to use tokenised-deposit infrastructure across institutions while maintaining connectivity with their existing payment operations.

It addresses a problem that is becoming increasingly important as more banks experiment with digital money:

What happens when every institution builds its own tokenised system?

Individual tokenised deposits have limited usefulness if they cannot interact with other banks, currencies and existing financial infrastructure.

Why it matters

Interoperability is emerging as one of the central challenges of tokenised finance.

Issuing digital money is relatively straightforward compared with making different forms of digital money work together across financial institutions.

Banks don't necessarily want to replace decades of existing payment infrastructure simply to support tokenisation.

The more realistic path may be to build connectivity between existing systems and new digital-money infrastructure.

That is increasingly where companies such as Swift, Oracle and major banks appear to be focusing their attention.

💱 Payments Infrastructure

Citi launches instant cross-border payments across multiple currencies including AUD

Not everything this week was about blockchain.

Citi became the first bank to go live across multiple markets on Swift's instant payments scheme.

Participating banks can access instant cross-border payments in currencies including AUD, GBP, INR and USD, with additional markets planned.

For Australian-dollar payments, Citi connects to Australia's New Payments Platform (NPP).

For sterling, it connects to the UK's Faster Payment System, while Indian rupee payments use India's Immediate Payment Service.

The model allows participating banks to access these domestic real-time payment networks through Citi's global infrastructure and existing Swift connectivity rather than establishing separate local banking relationships and technical integrations.

Why it matters

This may actually be one of the more important stories in this week's X Change. It provides a useful counterpoint to the stablecoin narrative. Traditional payment infrastructure isn't standing still.

Cross-border payments are becoming faster, domestic instant-payment systems are increasingly connected internationally, and established financial institutions are reducing some of the friction that stablecoins are often proposed to solve.

That means the question shouldn't be, “Will stablecoins replace bank payments?”

A more useful question is, "Where do stablecoins provide functionality that improving traditional payment rails still cannot?"

That could include 24/7 settlement across blockchain networks, programmability, interoperability with tokenised assets or moving value directly within digital-asset markets.

The comparison matters because stablecoins need to compete with the financial system that is being built, not the one that existed ten years ago.

Source: Citi, 29 September 2026.

💡 X Change Perspective

The real competition isn't stablecoins versus banks

Citi alone announced this week.

- It is connecting businesses to stablecoins through Coinbase.

- It is expanding its own tokenised-deposit network.

- And it is connecting traditional instant-payment systems across borders through Swift.

Those aren't necessarily competing strategies. They may be different rails for different types of transactions.

- A domestic payment might work perfectly well through an instant-payment network.

- A corporate treasury may prefer tokenised deposits that remain within its existing banking relationship.

- A payment moving between blockchain networks or settling against a tokenised asset may benefit from a stablecoin.

And in many cases, the business making or receiving the payment may not need to know which infrastructure was used underneath.

That suggests the future of digital money may not come down to whether stablecoins, tokenised deposits or traditional bank money wins.

All three could coexist. The more important question is increasingly:

Which form of money is best suited to each transaction and can the infrastructure move seamlessly between them?

This week's announcements suggest some of the world's largest financial institutions are starting to build around that assumption.

🇦🇺 What does this look like in Australian dollars?

This week's developments highlight an important point about stablecoin adoption.

Businesses don't necessarily need to become crypto businesses to use digital-money infrastructure.

They don't necessarily need to manage wallets themselves.

And they don't necessarily need to replace their existing banking relationships.

Increasingly, the technology can sit behind the financial products and workflows businesses already use.

The same opportunity exists for Australian dollars.

You already use Australian dollars.

AUDX simply lets you use them in more places.

From payments and digital-asset settlement to treasury and cross-border workflows, AUDX provides another way for Australian-dollar value to move through emerging digital financial infrastructure.

AUDX is 1:1 AUD backed