Pon Sagnanert

Commercial banks have begun exploring adoption of tokenized deposits, traditional deposits on digital ledgers. Tokenized deposits could improve payment efficiency for retail and institutional clients. Such tokens resemble stablecoins, for which a regulatory framework was authorized in 2025 under the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act).

Downloadable chart International remittance transfer cost varies widely The traditional process of transferring money internationally is complicated, often involving payment card networks, such as Visa or MasterCard, or a chain of bank-to-bank transactions. And every cross-border transfer straddles at least two rulebooks, with the gaps between those systems creating operational frictions.

The purchasing power parity (PPP) theory of exchange rates is easily understood: A basket of goods should have the same price in different markets when that price is expressed in a common currency. This assumes individual exchange rates, absent market frictions, can freely adjust to maintain parity. Intuitively, the currency of country A would be expected to eventually depreciate against country B’s currency in response to higher-than-expected inflation in country A.