The new gears of the payments system: Fiat, CBDC, Stablecoins and Crypto
The global payments ecosystem is undergoing a profound transformation driven by digitization and distributed ledger technology (DLT). Alongside the backbone of fiat money—supported by infrastructures such as RTGS systems, ACH vaults, card networks, and SWIFT messaging—new types of money with distinct functions are emerging: central bank digital currencies (CBDCs), which aim to extend monetary sovereignty to the digital realm; stablecoins, issued by private entities and backed by fiat reserves, which already handle volumes comparable to those of large international networks; and cryptocurrencies, which serve as a laboratory for technological innovation, although still limited for mass payments. Parallel ecosystems are emerging alongside these models—electronic money, big tech networks, and national instant payments—expanding the “highways” through which value flows. The future of payments will be hybrid, where sovereignty, innovation, and trust must coexist in balance.
From traditional infrastructures to digital tokens: how the architecture of global payments is being reconfigured
For over a century, global payments have rested on a single pillar: fiat currency issued by central banks. The dollar, the euro, and the yen are the lifeblood of the economy. But in the last decade, new forms of money have emerged, driven by blockchain and distributed ledger technology (DLT). Today, we’re talking not only about banknotes and bank transfers, but also about central bank digital currencies (CBDCs), stablecoins, and cryptocurrencies.
The question is no longer whether the way we pay will change, but which model will prevail in the future.
Fiat: the backbone of payments
The Fiat (fiat money) continues to play a dominant role.
It’s the currency we use daily to pay for purchases, receive our salaries, or settle international contracts. The roles are clear:
- Central bank as guarantor.
- Commercial banks as distributors.
But what truly sustains the system are its payment infrastructures, organized at different levels:
RTGS (Real-Time Gross Settlement) → Real-time gross settlement systems managed by central banks, which process high-value transactions (e.g., TARGET2 in Europe, Fedwire in the US).
ACH (Automated Clearing House) → Automated clearing houses that process retail payments in batches (payroll, direct debits, recurring transfers).
Instant payment networks → New national infrastructures that allow fiat currency to be moved in seconds (Bizum, PIX, UPI, FedNow).
International cards and networks → Visa, Mastercard, and American Express, which dominate global retail payments.SWIFT → The financial messaging network that connects more than 11,000 institutions worldwide and serves as the backbone of international transfers.
Fiat currency dominates in volume: we’re talking about trillions of dollars processed annually, making it the undisputed foundation of the payments system.
And what about DLT? Here it acts as a technological contribution: tokenization of deposits, faster settlements, and instant payment systems. It doesn’t change the money itself, but it does change the way it circulates.
CBDCs: sovereign money in digital format
Imagine having access to euros or dollars directly issued by your central bank, without the need for an intermediary bank. That’s a CBDC (Central Bank Digital Currency).
- Wholesale version: between financial institutions.
- Retail version: for the average citizen, as “digital cash.”
Experiments are already underway. The Bahamas launched the Sand Dollar, Nigeria the eNaira, and China is testing its e-CNY in millions of businesses. The European Central Bank projects a digital euro by 2026.
The driving force here is DLT: it enables programmable payments, international interoperability, and faster settlements. But the challenge is significant: what happens if citizens abandon commercial banks to keep all their money in the central bank? The CBDC promises efficiency, but it also opens a debate about privacy and financial stability.
Stablecoins: the private revolution is here
While CBDCs are still just a promise, stablecoins are a reality. Tokens like USDT (Tether) and USDC (Circle) already move more than $27 trillion a year, surpassing even Visa’s trading volume.
Why such widespread adoption?
- They’re fast.
- They’re cheap.
- They work the same in New York as in Singapore.
Stablecoins are issued by private companies, backed (in theory) by reserves in dollars or other safe assets. DLT isn’t an add-on: it’s their essence. They exist because they live on blockchains like Ethereum, Tron, and Solana.
But it’s not all sunshine and roses. Trust in issuers is their Achilles’ heel: are they truly backed 1:1 by fiat currency? Regulators around the world—from Europe with MiCA to the US with the GENIUS Act—are seeking to impose clear rules.
Cryptocurrencies: the laboratory of digital money
Bitcoin was born with a promise: “to be money without banks.” Fifteen years later, it has become more of an investment asset than a means of payment.
The roles are different:
- Miners and validators secure the network.
- Open communities maintain the protocols.
- Exchanges connect the user to the ecosystem.
DLT is everything here: Bitcoin and Ethereum are blockchains. They have brought smart contracts, the rise of DeFi, and the idea that money can truly be decentralized.
However, volatility and high transaction costs mean that, for now, they are more useful for speculation or innovation than for paying for a coffee.
Parallel ecosystems: the “highways” of digital Fiat
Beyond the different types of money, there are ecosystems that primarily move fiat currency but have transformed the payment experience. Electronic money (PayPal, M-Pesa, Revolut), big tech networks (Apple Pay, Alipay, WeChat Pay), and national instant payment systems (PIX in Brazil, UPI in India, FedNow in the US) are examples of infrastructures that don’t create new money but do redefine how fiat currency circulates. Local currencies and loyalty programs also coexist, functioning as quasi-currencies in limited environments. These ecosystems are essential for understanding the evolution of payments: they don’t compete with fiat, CBDCs, or stablecoins, but rather expand the “highways” along which value flows.
The four models under scrutiny
Fiat: will continue to dominate, with DLT improving the infrastructure.
CBDC: can redefine the relationship between citizens and sovereign money.
Stablecoins: are already part of everyday global digital payments.
Cryptocurrencies: pioneers and a laboratory for innovation, although impractical for mass payments.
In all cases, DLT acts as an accelerator: greater speed, greater traceability, and new ways to schedule transactions.
A new path: towards a hybrid system
The future of money will not be exclusive, but hybrid. Fiat will remain the backbone; CBDCs will add a layer of digital sovereignty; stablecoins will facilitate global, real-time payments; and cryptocurrencies will continue to drive innovation.
What’s at stake is not just the efficiency of payments, but also trust and monetary sovereignty. The challenge will be finding the balance between technological innovation, financial stability, and citizens’ rights.
The truth is, the world of payments will never be the same again: the era of digital money is here to stay.
