The article  was first published on OMFIF on  October 1st, 2025.    

Ryan Hayward is Head of Digital Assets at Barclays.

OMFIF spoke with Ryan Hayward, head of digital assets at Barclays, for the latest edition of the Digital Monetary Institute Journal. The discussion covered tokenisation, the role of stablecoins in cross-border settlement and public blockchains.

OMFIF: If a substantial portion of financial markets becomes tokenised, what do you see as the ideal solution for cash settlement?

Ryan Hayward: The ideal solution would be a model that combines the stability and trust of central bank money with the efficiency of tokenised rails. The ability to create an end-to-end digital money solution is certainly feasible, with banks able to transact with tokenised deposits, and major settlement banks able to use tokenised central bank reserves to ensure they retain risk-free settlement finality while enabling atomic delivery-versus-payment (and even payment-versus-payment). The DvP component obviously fits neatly within the effort to tokenise securities because they match the asset side. The PvP side will be more complicated, since connecting dollars and euros across jurisdictions will be difficult, but may prove even more powerful in the long term.

The latter could be enabled by companies such as Fnality, while tokenised commercial bank requires institutions to upgrade the capability of their money and ensure the ability to interoperate and meet prudential standards.

OMFIF: It remains to be seen whether the US will allow the Federal Reserve to create some kind of synchronisation solution or tokenised central bank reserves. Do you think stablecoins could play a role?

RH: Stablecoins do seem likely to play a role – potentially transitional – particularly in cross-border settlement and in markets where central bank money is not yet available in tokenised form. That said, I expect a lot of participants to have a strong preference for money provided by banks. In crypto circles, people will say that banks are leveraged and therefore stablecoins are more secure, but among traditional market participants and corporate treasurers, there is a lot of trust in and understanding of the exposure they take to banks.

However, their utility will depend heavily on regulatory clarity, capital treatment and operational resilience, some of which is coming via the US’ Genius Act. A key distinction will be between bank-issued tokenised deposits, which sit within existing prudential frameworks, and non-bank stablecoins, which will need robust guardrails to achieve broad institutional adoption.

OMFIF: As new cash settlement solutions emerge – some provided by non-banks – how do you see the role of banks changing?

RH: Banks remain uniquely positioned as trusted custodians of client money and systemic liquidity providers. While non-bank players may innovate around speed and user experience, banks will be expected to ensure credit intermediation, compliance with anti-money laundering/countering the financing of terrorism regimes, and integration with existing payment, clearing and collateral systems.

In practice, banks will act as the connective tissue, bridging regulated money with new tokenised settlement layers. I see that playing out currently, as non-banks look to secure banking relationships and services with traditional institutions or even contemplate becoming banks themselves. It’s also worth highlighting that there’s a natural pull factor to work with banks because that’s how you secure credit. Regulators have an incentive to ensure that credit creation is not stifled.

OMFIF: We’re seeing banks exploring public blockchains now and starting to work with tokenised deposits. Apart from being able to issue settlement instruments, what kinds of services can banks offer in a universe of tokenised cash solutions?

RH: I do see banks as having a major role to play. As they develop capabilities to service decentralised financial institutions, greater regulatory clarify emerges and institutions establish appropriate financial crime frameworks.

Beyond issuance, banks can offer liquidity, foreign exchange and intraday credit provision against tokenised settlement assets. They can also offer custody and safekeeping of digital cash instruments integrated with securities services; interoperability solutions, linking tokenised settlement systems with legacy payment rails; risk management services, including collateral transformation and margining in tokenised ecosystems as well as advisory and structuring, helping clients optimise treasury, liquidity and capital management in a tokenised world.

OMFIF: As well as stablecoins and tokenised deposits, we’re seeing other settlement assets emerge, like tokenised money market funds. Do you see those playing a big role?

RH: Banks, of course, already offer MMFs so we have a client base that is used to that product from banks. It’s not yet clear if they will want a tokenised version of MMFs. For that to be an important development depends on a number of factors. Banks will obviously need to provide the infrastructure to ensure they are liquid and can be easily redeemed, but there is an even more important point: will they be eligible for collateral? Banks have no control over that and, unless that regulatory hurdle is overcome, I think demand for tokenised MMFs will be limited.

OMFIF: How do you see mutual acceptance working between banks? For instance, will Barclays accept HSBC tokens?

RH: Mutual acceptance will be critical, but it will not emerge organically. It will require common standards, regulatory clarity and robust interoperability frameworks. Industry consortia, supported by central bank oversight, are the most likely vehicle to ensure that tokens issued by one bank can be redeemed seamlessly by another. Without such frameworks, fragmentation could undermine the efficiency gains of tokenisation. That is why Barclays has worked closely on initiatives such as the Regulated Liability Network, which has helped UK banks think through some of these exact issues.

Although stablecoins and public networks are promising and exciting, regulators are much more comfortable with permissioned environments, and there is definitely an important role for permissioned networks to play in facilitating the exchange of value between banks.