Stablecoin adoption tests banks’ need for purpose-built payment rails

Written by Russell Pereira

Jun 16, 2026
9 min

Brian Mehler, chief executive officer of Stable, argues that banks need payment rails designed around operational certainty, regulatory usability and market neutrality, not blockchains adapted from general-purpose markets.

Financial institutions across Asia have spent the past two years moving from stablecoin pilots to deployment questions. Banks have built blockchain teams, tested tokenised settlement and tracked regulatory frameworks in Singapore, Hong Kong and Japan. They are no longer asking only whether blockchain can move value, but whether stablecoin rails can meet the operating standards they apply to critical payment infrastructure.

Banks are assessing stablecoins alongside tokenised deposits, bank-issued stablecoins, private settlement networks and upgrades to cross-border payment infrastructure. Brian Mehler, chief executive officer of Stable, argues that banks need rails that behave like payment infrastructure, not networks first designed for broader crypto activity and later adapted for payments. They need predictable fees, stable settlement assets, capacity assurance and neutral access before they can move institutional flows at scale. "When repurposing a general-purpose chain," he noted, "there are a lot of compromises or sacrifices that have to be made."

Stable is a layer-one blockchain, a base settlement network that processes transactions directly rather than relying on another blockchain. Mehler said the network has been designed specifically for payments, with features intended to reduce volatile asset exposure, make fees more predictable, improve settlement finality and give enterprise users greater assurance over processing capacity. "If you're not focused on fixing a solution and providing the best product," he argued, "you're going to be making those compromises."

Removing the volatile asset from the transaction

Stable’s most visible payment-first design choice is its gas token. Gas fees are the small charges users pay to process transactions on a blockchain; on most networks, these fees must be paid in the chain's own native cryptocurrency, whose value fluctuates with market conditions. For a corporate treasury or compliance team, Mehler said that creates an avoidable operating burden. The institution must hold a volatile digital asset solely to fund transaction processing, then price it, account for it and manage the audit consequences.

Stable replaced its native token with Tether (USDT), the United States dollar-backed stablecoin that Mehler described as accounting for roughly 60% of the stablecoin market. Users pay transaction fees in the same asset they are already moving, which Stable says removes the need to hold a separate volatile instrument for gas. "From a compliance audit standpoint," Mehler observed, "there is a lot of mark-to-market pricing that needs to take place for digital assets, and it becomes a complication." Stable also supports other stablecoin assets where compliance teams require an alternative to USDT, reflecting differences in bank mandates, asset preferences and regulatory constraints across Asia.

Predictable fees as an enterprise requirement

Fee predictability matters because institutions manage payments as scheduled, auditable operations. On general-purpose blockchains, Mehler highlighted how users can pay a priority fee on top of the base transaction cost to secure faster processing. That mechanism works when the network is lightly loaded but can produce sharp fee spikes when global trading activity surges.

Mehler said that when all major markets are active, a general-purpose chain might charge $2.50 to confirm a five-dollar transaction. He said some Asian institutions have adapted by concentrating high-volume activity in the morning, before European and United States markets come online and drive fees higher.

Stable sets the priority fee permanently to zero, so users do not need to bid for a faster place in the processing queue. In Mehler’s example, a fee that costs a hundredth of a cent at 8am in Singapore would cost the same at 8pm. "We remove the volatile spiking as well as the volatile asset," Mehler noted.

Guaranteed block space for institutions

Bankers do not buy infrastructure on throughput claims alone. They assess operational risk, uptime, service commitments and the ability of a provider to meet agreed processing standards during stress periods. Stable’s planned guaranteed block space feature, which Mehler said is expected to be released following a security audit in June 2026, is designed to let enterprise clients reserve processing capacity with next-block confirmation guarantees.

Stable describes the feature as an attempt to translate blockchain capacity into the familiar language of the service-level agreement (SLA). Payments need dependable access to settlement capacity, particularly when other activity congests a network. Mehler argued that a general-purpose chain cannot easily replicate guaranteed block space because it cannot segment traffic by use case without agreement from a distributed validator community with competing priorities.

A network that supports multiple use cases must serve all those demands at once when market activity spikes. Payments do not receive preference simply because a bank needs certainty. Mehler summarised the limitation directly when he said, "You could not segment out the traffic for just payments on a general-purpose chain."

Why bank-built chains create the problem they claim to solve

If general-purpose public chains struggle to provide certainty, bank-owned chains create a different problem in Mehler’s view: neutrality. Large financial institutions have begun exploring proprietary blockchain networks and bank-issued stablecoins as stablecoin infrastructure matures. Each institution wants to keep value within its own ecosystem, reduce counterparty exposure and control the settlement layer.

Mehler is sceptical of the model for reasons rooted in basic competitive dynamics. A bank that builds its own network controls the flows on that network, and rival institutions may not readily integrate onto infrastructure owned by a competitor. "I would be very hard-pressed to imagine a world where Bank of America launches a network and JPMorgan launches a network in the US, and they do a direct integration," he observed. "Someone is going to have to lose flows to the other."

Bank-issued chains may still serve internal settlement, liquidity management and audit purposes, but Mehler doubts they can function as a common settlement layer for the broader market. Cross-border payments require a connecting layer that competing institutions can use without conceding control to one another. In Mehler's view, the industry needs a neutral layer with no institutional allegiances, similar to the role the Society for Worldwide Interbank Financial Telecommunication (SWIFT) plays in the existing correspondent banking system. He said that as SWIFT is a messaging network, not a bank; it can serve competing institutions because it has no stake in whose flows prevail.

Asia as the proving ground for neutral rails

Neutral infrastructure becomes more important in Asia, where cross-border flows often involve multiple jurisdictions, payment providers and liquidity conditions. Domestic payment systems may already work well in major financial centres, but cross-border corridors still face cut-off times, intermediary charges, prefunding needs and liquidity gaps. The most immediate use cases are likely to sit with payment service providers (PSPs), remittance companies, corporate treasury teams and small business trade flows in those corridors.

Mehler cited a transfer from Singapore to a less liquid corridor, such as Jamaica, where funds may pass through correspondent banks, beneficiary banks and limited liquidity pools before reaching the recipient. The sender may see only a form, fee and estimated arrival date, while the institution manages settlement delays, intermediary charges and uncertain liquidity in the background.

Stablecoin rails may reduce those frictions only if the blockchain layer behaves like payment infrastructure. Mehler said PSPs understand the payment problem, but many lack the blockchain engineering depth to solve it alone.

Regulation sets the floor but infrastructure determines the ceiling

Clear rules may allow institutions to participate, but fragmented corridors still need interoperable and predictable settlement rails. Mehler views regulation as an adoption trigger rather than the full answer.

Each time a major jurisdiction publishes a stablecoin framework, he said, it encourages institutions that have already prepared to move but lacked the confidence to deploy. "Rather than calling it non-compliant, institutions can say it is not yet regulated because there is no clear framework to measure compliance against," he noted, describing the conversation that currently stalls many deployments.

Mehler's view is that compliance responsibility sits with the institutions using the network, including banks, PSPs and money transmitters, rather than with the chain itself. That follows the logic of existing financial infrastructure, where regulated participants remain accountable for how they access and use shared networks. Regulation, in this view, does not sit primarily at the protocol layer but with the financial institutions that originate, receive and intermediate the flows.

A regulated stablecoin running on unpredictable rails will not satisfy a bank's treasury, compliance or operations teams if the infrastructure cannot support enterprise-grade payment discipline. Regulation sets the minimum condition for adoption, while infrastructure determines whether adoption can scale. Mehler’s argument is that banks need both before they can move beyond pilots and limited corridors.

Programmable money and the next phase of payment infrastructure

Programmable money becomes relevant after the infrastructure questions are resolved. Banks are unlikely to build rules-based payment execution, agent-controlled wallets or automated settlement on rails that lack predictable costs, assured capacity and clear controls. With those foundations, programmability can support familiar banking disciplines such as mandates, approval limits, segregation of duties and exception handling.

Mehler said the risk is that automated agents could be given too much control over institutional funds if all assets sit in one programmable account. He argued that institutions can manage that risk through compartmentalisation rather than by placing all funds in a single wallet. “You would break it up into separate accounts,” he noted. “You can have separate agents doing separate parts of the deal or the transaction, which limits that risk.”

The economics of that structure depend on the cost of operating multiple wallets, instructions and replenishment flows. Mehler argued that the cost on Stable would remain low relative to existing payment alternatives because replenishing an agent wallet and executing a payment might each cost only a fraction of a cent. Combined, he said, the total remains below the $45 to $70 that a SWIFT transfer with associated deposit fees can typically cost. "Those few fractions of a cent combined are still going to be a minuscule amount compared to what it costs today to send a SWIFT transfer," he argued.

The test for institutional adoption

Stable must now demonstrate that regulated institutions can embed its rails into live corridors without adding operational, liquidity or compliance risk. Banks will measure the infrastructure against the standards they apply to critical payment rails, not against the expectations of crypto-native users.

The first scalable use cases are likely to emerge where correspondent banking remains slow, liquidity is thin and transaction costs remain high. Stablecoin rails will not gain institutional adoption simply because they use blockchain. They will need to behave like resilient, accountable and auditable payment infrastructure.