Mike McCoy

Liquidity Coordination > Faster Settlement

When building tokenized architectures with stablecoins, tokenized deposits, and real-time settlement solutions, the most obvious benefit is speed. Blockchains settle faster than SWIFT, ACH, RTP, FedNow, and the rest.

I’d argue the larger advantage is coordination. These networks can align obligations, liquidity, collateral, and settlement across many forms of money far more effectively than legacy rails.

Tokenization across disconnected networks often increases liquidity requirements. It adds new silos. That makes the use case worse, not better.

When liquidity is fragmented:
More tokenization = more trapped liquidity.

The money may settle faster, but the routes become more disjointed. Coordinating across all the responsible parties takes longer.

The real win comes from infrastructure that meets businesses where they already are: optimizing obligations before liquidity is consumed, routing them cleanly, and avoiding extra steps or new trapped pools.

The company that issues the most tokens will not win.

The company that coordinates settlement across networks and currency types will.

Commerce operates 24/7, but treasury and liquidity management still largely run on banking hours, batch processes and in prefunded, fragmented infrastructure.

At @FiservForum on Tuesday, August 18th myself, Joseph Virgilio (UBank) and Anaje Leslie explore the topic of Money Made to Move Around the Clock. Where stablecoins, tokenized deposits and smart contract liquidity management allow money to settle, optimize and earn yield 24/7/365.

We'll cover:
- How 24/7 always-on infra makes a bank money
- Delays with APIs, Core Ledgers and how digital assets improves the flow
- Compliance processes needed for open-source, onchain rails
- Programmable escrow and beneficial controls the technology brings

Reducing trapped liquidity, improving capital efficiency and net interest margins for banks credit unions and their customers. Creating a better experience.

Money Made to Move Around the Clock
Tuesday, August 18th | 4:15PM - 5:00PM PT | Fiserv Forum, Las Vegas

The Liquidity Mobility Problem

Another fair question came from a bank CFO this week:

“If I move money from our treasury into tokenized deposits, how is that different from pre-funding an account? I already do this for ACH, RTP, cards, and more. Isn’t this just another trapped bucket of funds?”

Fair question. Tokenized deposits do reserve liquidity in their own pool. The difference is what that pool unlocks.

Tokenized deposits become your bank’s single, central route to:
i) earn yield
ii) instantly reroute treasury funds to the exact rail you need, anytime

From one tokenized deposit account you can deploy treasury liquidity 24/7/365 for ACH, RTP, SWIFT, card payments, or loan disbursements.

One account. Many purposes.

Optionality without sacrificing yield.

The same liquidity reusable across every use case.

The bottleneck in tokenized finance isn’t tokenizing assets.
It’s financing the liquidity those assets demand.

As tokenized deposits, money-market funds, real-world assets, receivables, and securities accelerate onchain, the system generates sharper, more frequent liquidity gaps. The window between the moment an asset moves and the moment cash is actually available.

Stablecoins solve movement.
Stablecoins don't solve liquidity.

Stablecoins are pre-funded by design. The liquidity they can deliver is permanently capped by the reserves already sitting on a balance sheet.

Stablecoins are gift cards.
Tokenized deposits are credit cards.

Tokenized deposits let a bank create liquidity on demand, extending credit for just-in-time settlement the instant it is needed.

Creating elastic liquidity vs. prefunded liquidity.

For every asset on a bank’s balance sheet, the competitive question becomes:
“How do I borrow against this asset instantly?”

The winners will be those who can turn balance-sheet access, credit capacity, and liquidity creation into real-time, 24/7 settlement.

Any funds that sit idle, neither working for the bank nor for the customer, around the clock, has become a liability.

The Race to Own Idle Capital

Businesses, banks and platforms are trying to reduce the amount of cash, liquidity, collateral and working capital that is trapped around the payment process today so their balance sheets become more efficient.

This is the biggest advantage of tokenized money.

Merchants want to reduce FX exposure, settlement latency and treasury friction across their global businesses.

Banks want to control reserves, issuance, liquidity and governance on their deposits and how money moves through their balance sheet.

Social platforms, gig economies, and prediction markets want their customers’ cash and stablecoin collateral to earn yield inside their own treasuries. Rather than sitting idle and requiring them to pre-fund user accounts from their treasury every time customers earn.

Fees around digital money are on a race to the bottom. Earning a few basis points every time money moves won't cut it and customers are catching on.

The most valuable business will not be the one that moves the most money. It will be the one that owns the destination of idle money.