As more financial institutions expand into digital assets, UK banking giant Barclays has invested in newly launched Ubyx, a platform that facilitates the transfer of stablecoins and tokenized deposits.
Although the size of the investment was not disclosed, Barclays said it marked the bank’s first investment in a stablecoin company. However, it was not the first vote of confidence for Ubyx, which has already attracted backing from Coinbase and Galaxy Digital, among others.
Barclays said its objective is to bring digital assets under the financial services industry’s regulatory umbrella.
“This is an interesting move on Barclays’ end,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “This is more of a payment network infrastructure play rather than a ‘bet on crypto.’ If stablecoins and tokenized deposits are going to function as regulated digital/tokenized cash, redemption needs to become predictable and issuer agnostic.”
Moving Incrementally
Institutional investments in digital assets has accelerated following the proposal and passage of the GENIUS Act in the U.S., which regulates stablecoins. Previously, many financial institutions were reluctant to pursue stablecoin strategies due to compliance concerns.
Now, nearly all leading U.S. banks are moving forward with stablecoin plans, albeit incrementally. For example, JPMorgan Chase recently launched JPMCoin, though the stablecoin is primarily designed for transfers among institutional clients.
Similarly, Citi said it’s exploring a stablecoin but considers tokenized deposits as more promising for its use cases.
Redeeming at Par
Although traditional banks have taken a more measured approach to stablecoins, many other organizations are forging ahead. This includes companies as diverse as Sony, which plans to launch a stablecoin for its gaming ecosystem, and buy now, pay later leader Klarna.
Early discussions around stablecoins focused on Circle and Tether, and on which stablecoin would ultimately prevail. However, it is becoming clear that the stablecoin market is likely to be highly fragmented.
This fragmentation is what makes a platform like Ubyx particularly intriguing to investors, as it could potentially serve as a central hub connecting these various offerings.
“Anyone can issue a token,” Hugentobler said. “The winners here are those that can redeem them at par at any time within the banking ecosystem. They won’t be treated as cash unless this aspect of redeemability is 100% reliable. At the end of the day, FIs will require interoperability between tokenized deposits and stablecoins. Barclays understands this, and that’s why they allocated.”
