Why Interoperability Is the Missing Layer in Banks' Digital Asset Stack
Banks Are Missing the Most Important Piece of Their Digital Asset Strategy
For most of the past decade, banks adapted to digital disruption on their own terms. They built mobile apps, acquired fintechs, and launched digital units, while keeping the core customer relationship intact. Banks set the pace of that change themselves, rolling out new digital habits only as fast as customers were ready to adopt them.
However, I believe the current technological shift is harder to manage on those same terms. Stablecoins can settle cross-border payments instantly, on weekends and outside business hours, without correspondent intermediaries, and at a fraction of the cost of existing rails. Programmable settlement lets retail and corporate customers automatically shift deposits into higher-yield accounts in real time, triggered by pre-set conditions instead of requiring the bank to process the transfer manually.
So, what we see today is that as these capabilities reach institutional scale, the friction that kept deposits in place begins to disappear. McKinsey's Global Banking Annual Review 2026 (GBAR) identifies digital assets, alongside agentic AI, as one of the forces now “threatening” to reshape the customer relationship. It is also one of the areas where banks and fintechs are concentrating most of their innovation investment.
Banks are responding by building each digital transformation initiative on its own platform, governed by its own team, connected to nothing else. Let’s consider, for example, JPMorgan's Kinexys, which already processes tokenized deposits on its proprietary platform; or Citibank and BNY, which have their own live deployments. Wholesale CBDC trials are running independently in countries all over the world, including France, Singapore, and Switzerland.
McKinsey identifies a three-layer settlement architecture as the emerging structure for institutional money movement, where stablecoins, tokenized deposits, and wholesale CBDCs each serve a distinct function. What's missing is the infrastructure that connects these three layers to each other. In this piece, I walk through this architecture and make the case for why interoperability is the missing layer.
A Three-Layer Architecture
A companion piece to the GBAR, Beyond stablecoins: The emerging architecture of on-chain money (McKinsey, May 2026), maps out what each layer does and why it exists.
- Stablecoins function as a "money in motion" layer, optimized for rapid, lower-value, cross-border transactions and automated disbursements. As of early 2026, global stablecoin circulation sits at approximately $300 billion, supporting roughly $400 billion in organic payment activity in 2025. Regulatory frameworks in Europe (MiCA), Japan, Singapore, and the US (GENIUS Act) are establishing the compliance structure that allows regulated institutions to engage with this layer directly.
- Tokenized bank deposits function as "money at rest", supporting treasury balances, institutional payments, and interbank settlement. Major global banks are moving more than $4 trillion annually through tokenized deposit infrastructure, an order of magnitude larger than stablecoin payments. JPMorgan's Kinexys alone is estimated to facilitate more than $1 trillion of that annually.
- Wholesale CBDCs function as "settlement money". This is the final layer that enables irrevocable finality across borders. It is the only sovereign-issued asset in the stack, which means it carries no counterparty risk between disparate systems. That being said, McKinsey's most optimistic projections estimate several years before CBDCs reach widespread commercial deployment.
Without Interoperability, the Stack Breaks
McKinsey names interoperability as "among the primary constraints on the growth of tokenized deposits", pointing to coordination across banks as slow, complex, and commercially sensitive.
Most deployments run on proprietary, permissioned ledgers that operate as closed systems, and a tokenized dollar issued by one bank is not easily interchangeable with one issued by another. In my view, this is where the real complexity lies. A bank running tokenized deposits and preparing for wholesale CBDCs is building on two separate closed systems, and the architecture McKinsey describes only works if those systems can communicate.
We see that the industry is developing three broad approaches to solve this, each with different trade-offs:
- Shared ledgers, such as BIS Project Agora and the UK's tokenized sterling deposit initiative, achieve interoperability by hosting commercial bank deposits and wholesale central bank money on a single platform.
- Orchestration layers, such as Swift and Partior, bridge existing payment rails to tokenized assets without requiring a shared ledger.
- And bridges between networks, such as Chainlink CCIP and Canton, enable disparate digital ledgers to settle with each other while preserving participant privacy.
Shared ledgers in particular depend on legal and regulatory alignment across multiple institutions and jurisdictions before they become effective, which means the technical infrastructure needs to be in place before that alignment arrives.
How Cosmos Solves the Interoperability Gap
Selecting that infrastructure is a decision that determines everything built on top of it. An architecture with no track record under real institutional conditions provides limited assurance. But the Cosmos stack has that track record.
The Inter-Blockchain Communication Protocol (IBC) is the only open standard for cross-ledger interoperability with five years of continuous production operation, 115+ connected digital ledgers, and over $50 billion in asset transfer value.
For banks and institutions, IBC changes what is operationally possible. Institutions connect directly, peer-to-peer, between any two ledgers or systems, with no third-party intermediary in the path. Each institution retains full control over its cybersecurity profile and can define custom access controls and automated workflows built around its own regulatory and security requirements.
A network built this way stays flexible as the business evolves, connecting to new systems as they come online without rebuilding existing infrastructure.
Beyond token movement, institutions can transmit data and set up workflows across connected systems. A network limited to settling tokens still leaves compliance, reporting, and surrounding multi-party processes to be assembled separately.
Cosmos has deployed IBC across the asset classes McKinsey describes in the settlement stack.
- Progmat, backed by Mizuho, JPX, and other leading Japanese banks, holds a 48% share of Japan's tokenized asset issuance market as of 2024. It uses IBC for regulated issuance of yen-backed stablecoins and tokenized real estate.
- A central bank in Latin America deployed IBC for CBDC issuance and government bond tokenization on a single platform, with interoperability built for future connectivity with other central banks and networks, with governance retained entirely by the central bank.
The Infrastructure Decision Banks Face Now
What I take from McKinsey's framework is that all three layers are coming, at different speeds, for different functions. The report's call to action for banks is to build precision strategies and execute with increased velocity, treating digital assets as part of that acceleration. And I think that is great advice. For banks, acting on it starts with interoperability decisions about which systems talk to each other and over what infrastructure.
Each layer that lands in production without a connectivity strategy locks in a constraint the next layer has to work around. The practical move is to engage with the infrastructure now, test it, and adapt as the market develops.
About the Author
Simona Negru is Content Marketing Manager at Cosmos, where she oversees the full content marketing funnel across brand positioning, GTM, PR, sales enablement, and content campaigns. With 13+ years in B2B marketing across fintech, payments, fraud prevention, and digital assets, she has helped companies define their voice and grow their presence in competitive markets, securing 100+ media clippings annually and co-marketing presence at flagship industry events including Money 20/20, MPE, ICE, iGB, SBC, and Pay360. Her work has been featured in Merchant Payments Ecosystem magazine, Issue 88.
