# The Nominal System Structure in Solving Stablecoin Challenges: How Banks Transform a Threat into a Golden Opportunity

When some talk about stablecoins, they hear warnings from banks about the risk of deposit runs. But this logic might be completely upside down. The simple declarative sentence that can change everything is: “Banks can treat stablecoins the same way they treat checks.” If an authoritative entity states this, every bank and fintech company worldwide will immediately know what to do. That’s exactly what Ubyx is betting on.

From Clash to Collaboration: Why Banking Giants Changed Their Minds on Stablecoins

To understand the current revolution in banks’ attitudes toward digital assets, we first need to look at the path these institutions have taken. Tony MacLoughlin, who spent nearly two decades at Citigroup as Head of Payments and Commercial Solutions, served as a unique bridge between two conflicting worlds.

While at Citigroup, MacLoughlin was not just an employee but a key architect of the Regulated Liability Network (RLN), which aimed to create a private blockchain for central banks and financial institutions. He tested the idea with the U.S. Federal Reserve and the UK Financial Conduct Authority, and even influenced the Monetary Authority of Singapore. The Bank for International Settlements acknowledged that RLN inspired its “Single Ledger” concept, and projects like Agora replicated the same structure with seven central banks and over 40 financial institutions.

But after years of effort, MacLoughlin realized that private blockchains faced a fundamental problem: the “bootstrap” issue. All major central banks need to join a network that doesn’t yet exist, and no one wants to be the first. Public blockchains, however, solved this problem long ago: they have users, liquidity, and developers.

The real turning point came with the 2024 U.S. elections. After assessing political trends, MacLoughlin concluded that regulation of stablecoins was inevitable, meaning banks would eventually be allowed to operate on public chains. He was proven right when the GENIUS Act came into effect in July 2025. At that moment, he decided to leave Citigroup and founded Ubyx in March 2025.

The Classification Issue: How Banks and Regulators Misunderstood Stablecoins

On March 3, 2026, President Trump publicly criticized American banks for trying to “wreck” the GENIUS Act and hinder stablecoin regulation. The core debate revolves around a fundamental question: Are stablecoins a threat to deposits or an income opportunity?

Banks continued to oppose yield-bearing stablecoins, arguing they attract funds away from the traditional banking system. The Bank of England even considered imposing a cap on stablecoin holdings. This fear isn’t unfounded: the global issuance of stablecoins has surpassed $300 billion and is growing rapidly.

But MacLoughlin says the question is completely misphrased. The core issue lies in misclassification: “If regulators define stablecoins as ‘crypto assets linked to fiat currency,’ that’s fundamentally wrong. It’s like saying a check is a paper linked to fiat currency.”

The mistake is using technology to define the instrument, rather than its actual function. The promise of redemption at face value is the essence, not the technology. Whether written as “I owe you $10” on clay, paper, or ERC-20 tokens on Ethereum, the legal instrument is the same. What matters is who issued the obligation and whether it’s enforceable.

Traveler’s Checks: A Historical Lesson on Payment Instruments

In this context, MacLoughlin offers a powerful historical analogy: Traveler’s Checks issued by American Express in 1891. Before the advent of debit cards and ATMs, traveler’s checks were the main way to travel safely with cash. They were purchased in advance for a specific amount and accepted worldwide as real cash.

Why did traveler’s checks enjoy global acceptance? Not because of any unique property of the paper itself, but because American Express, Visa, and Thomas Cook built settlement networks that guaranteed merchants anywhere could convert the check into cash at face value. When these networks collapsed, traveler’s checks fell out of use. The instrument didn’t fail; the channel did.

Traveler’s checks share exactly the same properties as stablecoins: a dollar-denominated instrument, not issued by a bank, pre-funded, fully backed, interest-free, bearer transferable, and redeemable at face value. Yet most people never used them, and don’t realize that stablecoins require the same infrastructure as traveler’s checks.

How to Convert: The Settlement Mechanism Turning Stablecoins into Real Deposits

Here’s the crucial part, seemingly mundane: the settlement infrastructure. In traditional exchanges, stablecoins are bought and sold at floating market prices, with no guarantee of redemption at face value. But Ubyx uses a completely different model.

Ubyx employs a “redemption” model rather than “buying and selling.” The goal is to recover the face value, like depositing a check at a bank. You don’t care who issued the check or from which bank it came; you hand it over to the bank, and they deposit the amount into your account, while the settlement system behind the scenes collects funds from the issuer.

The process works as follows:

• Customer deposits a stablecoin (e.g., USDC) into a bank wallet
• The bank sends tokens to Ubyx
• Ubyx converts tokens to the issuer (e.g., Circle)
• The issuer verifies the tokens and releases dollars from its reserve held at the registered bank
• The dollars are returned to the sending bank via Ubyx and credited to the customer (usually minus transfer fees)

If the issuer fails to pay, the bank reclaims the tokens from the customer, just like a rejected check. The bank bears no balance sheet risk during settlement.

MacLoughlin describes this system as a “black box” with three states:

• Stablecoin inflow, cash outflow (redemption)
• Cash inflow, stablecoin outflow (issuance)
• Stablecoin A inflow, stablecoin B outflow (swap)

It’s designed to be independent of any specific issuer, public chain, or fiat currency. At launch, issuers include Paxos, Ripple, Agora, Transfero, Monerium, GMO Trust, BiLira, and dozens of others, covering USD, GBP, EUR, and emerging market currencies across multiple public chains.

The Accounts That Make Banks Invest: $36 Billion in Potential Revenue

Here’s where the narrative shifts from fear to opportunity. MacLoughlin provides an impactful rough estimate:

Assuming the stablecoin market reaches $1 trillion (currently $300 billion and growing). If we conservatively assume 0.5% of circulating stablecoins are redeemed daily, the annual redemption volume would be about $1.8 trillion.

If banks charge a fee of 100 basis points, plus a cross-border spread of 100 basis points, annual revenue could reach $36 billion.

These calculations look especially attractive for non-U.S. banks. Every dollar of stablecoin entering the European or Asian banking system and converted into local currency generates net foreign income for the receiving bank. FX conversions create “massive profits” for financial institutions.

Moreover, this model aligns with central bank goals. When stablecoins are redeemed through regulators into deposit accounts, they become visible to the tax system, subject to AML and KYC checks, and then converted into local currency on the bank’s balance sheet.

The result: central banks gain compliance and monetary transparency, while commercial banks earn fee income and expand their balance sheets. Customers get a redemption at face value. The simple declarative MacLoughlin repeats to bank CEOs is clear: “Accept first, then issue. Why? Because you will make a lot of money from acceptance.”

Who Supports This Model: Major Investors Join the Network

The list of Ubyx investors tells an important story. The company completed a $10 million seed round in June 2025, led by Galaxy Ventures, with participation from rarely-seen entities: Founders Fund (Peter Thiel), Coinbase Ventures, VanEck, LayerZero.

Libertarian capital from Silicon Valley and major traditional financial firms—top crypto exchanges and institutions—are investing in stablecoin settlement infrastructure.

Most importantly, some investors are also users of the network: Paxos and Monerium are both investors and issuers within the system; Bipio and Bocone invest as strategic partners. This “investor-as-user” structure is intentional, and MacLoughlin compares it openly to the ownership structure of early Visa and Mastercard: the banks that use the network are the same ones that own it.

In January 2026, Barclays Bank—Britain’s second-largest bank by market cap and the first major bank to make a strategic investment in a stablecoin company—announced a strategic investment. Ryan Hayward, head of digital assets at Barclays, said: “Interoperability is key to unlocking the full potential of digital assets.” The message was clear: one of Europe’s biggest banks understood the logic of stablecoin settlement and decided to invest.

A month later, AB Xelerate, the fintech accelerator of the Arab Bank Group, made another strategic investment. Now U.S. venture funds, European banks, and Middle Eastern financial infrastructure are all moving in the same direction.

The Road Ahead: Remaining Challenges and Market Opportunities

Despite this momentum, major hurdles remain. Circle launched its own private Circle Payments network in mid-2025, providing exclusive settlement infrastructure for USDC. With enough scale, Circle could build its own distribution system, raising the question: will a single-issuer network maintain control, or will multi-issuer settlement models prevail?

Ubyx’s founder believes history favors a multi-issuer approach. But first-mover advantage and market share control are undeniable realities.

There’s also an unresolved debate about revenue sharing between banks and crypto firms. A proposed OCC rule assumes a model that could conflict with stablecoin yield mechanisms. If yields are banned, banks will feel more comfortable, but the scope of stablecoin use will be limited to payments and settlement, with a smaller, slower market.

If yields are allowed, stablecoin markets could grow exponentially, competing directly with deposits and money market funds. Banks would have strong incentives to build infrastructure quickly—either defensively or offensively.

Ubyx commits to open-source rulebooks and governance via DAO through tokens. This aligns with its philosophy but remains an untested model for regulated financial infrastructure.

Summary: Toward a New Model for Stablecoins

MacLoughlin’s journey exemplifies a broader shift in institutional thinking. Starting as an advocate for the fiat currency system, then building private chains for banks, and finally realizing that private chains can’t solve the widespread adoption problem—each step is rooted in a single vision: places to store money—on public chains, in wallets, with organized settlement infrastructure—that make every stablecoin as trustworthy and safe as a traditional check.

The key to this entire transition is a simple declarative sentence: banks can treat stablecoins like checks. If an acknowledged authority affirms this, every bank and fintech will immediately know what to do. Ubyx believes this moment is coming very soon.