The Battle of the Rails

Abstract: In this panel on stablecoins, real-time payments, tokenization, and the future of financial infrastructure, Vladimir Shatiryan (Partner, Blakes) moderated a discussion with Avinash Chidambaram (CEO, Cybrid), Brian Ford (VP, Business Solutions, ATB), and Jason Tong (CSO, Paytrie) on whether Canada’s Real-Time Rail will define the next generation of payments or whether stablecoins will leapfrog traditional rails altogether. The panel explored the use cases for stablecoins in domestic payments, cross-border transfers, merchant acceptance, corporate treasury, tokenized assets, and digital sovereignty, while also examining trust, reserve safeguards, regulatory clarity, and the role of banks in the stablecoin ecosystem. Across legal, infrastructure, banking, and stablecoin perspectives, the message was clear: stablecoins are no longer theoretical, real-time payments are not the finish line, and Canada needs clear rules, bank participation, and Canadian-dollar stablecoin infrastructure to remain competitive in the next phase of digital finance.

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Vladimir Shatiryan: A lot of things have happened over the past year or so in the Canadian payments and financial services space. We have stablecoin legislation. It is not in effect yet, but we have stablecoin legislation. There are promises that the Real-Time Rail will eventually launch, and we have a government that is more focused on innovation and fostering competition than perhaps prior administrations had been.

With that in mind, I am going to turn it over to Avinash, Jason, and Brian. Maybe you can introduce your role in this ecosystem, and then we will start with a global question: what are stablecoins solving in the Canadian financial marketplace that the existing rails, payment systems, and banking system are not able to solve?

Avinash Chidambaram: I am Avinash from Cybrid. We are a stablecoin infrastructure company. We allow businesses to convert from a traditional fiat payment into a stablecoin and then implement whatever use case they are trying to support.

The reason they use stablecoins is that they are much faster. Settlement happens almost instantly. They are transparent, so when you complete a transaction, you can prove on the blockchain that the transaction was done. They are also low cost, because the cost is essentially what the blockchain charges to complete the transaction.

Once you are in a stablecoin and want to make a payment to someone else, it happens in seconds. It settles instantly, and there is finality and transparency in that settlement.

The hope is that there are many more stablecoins issued in Canada and that more users can use them for a number of use cases, from peer-to-peer payments and cross-border payments to investments in real-world assets. Those are the kinds of use cases we enable with our infrastructure.

Brian Ford: I work with ATB Financial. We are a government-owned commercial bank and regional bank based in Alberta.

We have been at the forefront of banking the crypto industry for nine years, well ahead of much of the regulatory discussion. We have worked closely to bring in a risk framework that allows us to bank and support the industry. Today, we bank about 75% of the regulated crypto industry, including stablecoin providers.

I fundamentally believe stablecoins are going to transform financial services, not just within Canada but globally. We are already seeing it today.

It is about finality of payment, or what I call atomic settlement: immediate settlement. Whether that is cross-border payments or capital markets, we do not have atomic settlement today.

Real-Time Rail is real-time settlement, but it has been delayed for years. I was in Asia for a number of years, and we saw the implementation of real-time rails 15 to 20 years ago. Canada is behind.

I have a view that stablecoins will leapfrog Real-Time Rail, not just for international payments but also for domestic payments.

Jason Tong: My name is Jason Tong, CSO of Paytrie. I am also an adviser to Loon, which is a Canadian stablecoin issuer.

When we think about Real-Time Rail versus stablecoins, I want to step back and think about how they interact. Right now, we are in the flip phone moment. Real-Time Rail is going to take us to the iPhone moment, and then we will have apps built on top of the iPhone that change the landscape.

Those apps are things that may not even have been thought of yet. We are talking about agentic payments, atomic settlement, and all the other things that become possible. I am excited about what is to come.

Vladimir Shatiryan: Maybe we are at the BlackBerry moment, or we are moving to the iPhone moment.

Turning back to Real-Time Rail, is Real-Time Rail dead on arrival? The use cases for stablecoins and cross-border payments are very compelling. If you send a wire, it goes to a correspondent bank domestically, then a correspondent bank in the home jurisdiction, then to the beneficiary’s bank. Stablecoins clearly bypass all of that.

But in the domestic space, if we have Real-Time Rail for P2P and B2B payments, subject to caps, and that velocity is supported by new infrastructure operated by Payments Canada, what is the specific domestic use case for stablecoins?

Avinash Chidambaram: We build a number of these use cases today, and we operate globally.

In the U.S., we use RTP and FedNow to fund the creation or minting of stablecoins. In our infrastructure, that takes about 45 seconds. If you send an RTP into our infrastructure, you can receive USDC in about 45 seconds.

Businesses use that to pay suppliers and contractors, or to make payments somewhere else in the world. It can take two weeks to get money to Hong Kong, but if you are running out of inventory and need someone to start shipping, you can do it the day your ERP tells you that you need inventory.

We also support retail use cases. For example, we support a company with 200 retail locations where people can buy burgers and shakes using stablecoins. There are millions of users in North America who have wallets with crypto in them. If they hold stablecoins in that wallet, they can scan a QR code and make a payment.

The reason merchants do this is cost. We might charge around 10 basis points for that transaction. The difference between that and paying 2% interchange is massive.

We were also able to settle to each store in 15 minutes. Someone scans a QR code, the merchant receives stablecoins, we convert them to U.S. dollars, and we use real-time rails to deliver the money to the business.

That is a massive improvement. In fact, we initially had to do it once a day because the businesses did not yet have the operations to reconcile money every 15 minutes.

Avinash Chidambaram: We are also working with wealth companies that are raising funding for real estate, ships, and even YouTubers raising capital for videos.

If you look at certain investment vehicles, global investors can invest up to $10,000. We process those investments over stablecoin. Someone anywhere in the world can send $10,000 worth of USDC, and we send that to the issuer, notify the transfer agent that a token representing the investment has been minted, and deliver that token to the user in their wallet.

Those use cases are already happening today.

We also work with banks to help them with cross-border payments. Banks in the southern U.S., for example, have communities of users who send money home. It is hard to send money through intermediary banking infrastructure and global settlement relationships. It takes time and is expensive.

Now, some regional banks are looking at stablecoins as a way to let customers send money to family in Mexico and other markets while avoiding much of that intermediary infrastructure.

Brian Ford: The one stat people need to know is that stablecoins already exist and are already used in Europe and Asia. Stablecoin volumes now exceed Visa and Mastercard combined. It is not necessarily apples to apples, and there is some noise in the numbers, but the volume exists today.

Cross-border payments are an obvious use case. They are slow and expensive today. Stablecoins create atomic settlement, real-time settlement, speed, efficiency, and lower cost.

Corporate treasury is another major use case. Today, corporate treasurers have balances all over the world. The ability for banks to offer a stablecoin, such as a JPMorgan-style coin, allows corporates to settle atomically between accounts around the world.

I came from the world of global banking, and I worked on multicurrency cross-border pools for corporates. It was slow, expensive, and legacy. Stablecoins can replace that.

There is also a use case for institutional players moving money on-chain within crypto. They do not necessarily want to move money out to fiat. They want to keep it on the blockchain.

And there is a domestic use case for retailers. When I talk to retailers, their single biggest cost is Visa and Mastercard. That is why you are seeing Visa and Mastercard buy stablecoin providers. They have to transform, just as banks have to transform.

Vladimir Shatiryan: Brian, why does Real-Time Rail not solve the interchange problem?

Brian Ford: Real-Time Rail helps, but it does not solve cross-border. I also think stablecoins are an easier payment rail mechanism in many cases.

I do not necessarily believe stablecoins replace Real-Time Rail. There will be a number of payment rails, and people will still use legacy rails, Real-Time Rail, stablecoins, and other methods. But I know the costing of Real-Time Rail versus stablecoins, and Real-Time Rail is much more expensive.

Stablecoins are a cheaper, more efficient, atomic, real-time settlement mechanism. I do not think they replace Real-Time Rail, but the cost benefit for banks can be better with stablecoins.

Avinash Chidambaram: Depending on the use case and the comfort of users, people will pick the payment vehicle of choice. Cash still exists. But there are now around 200 stablecoins issued globally within regulated frameworks.

We still need more rules to help the market really take off.

Jason Tong: I would add to Brian’s point about cost. You may have Real-Time Rail, but the cost of making micropayments may still be prohibitive.

Will you be able to pay fractions of a cent for API calls when agents are moving funds between agents? Those use cases are going to come into play in the domestic market as well. Cross-border payments are obviously a big one too.

Vladimir Shatiryan: We have talked about the velocity stablecoins introduce and the stability of value tied to reserves. What about trust?

If you look at stablecoin legislation, it has strict standards for maintaining reserves in the underlying currency, cash-like investments, high-quality liquid assets, and requirements for monthly attestations by counsel and certified accountants that the reserve matches the stablecoin issuance.

But in other contexts, like payment service providers, if a company misappropriates end-user funds held in trust, end users can be left standing as unsecured creditors for the shortfall. That does not provide the same kind of deposit insurance protection.

If we apply that to the stablecoin regime, is there a concern that retail end users do not have the same level of trust and reliability that they would have with fiat currency or traditional payment systems?

Jason Tong: At the end of the day, there are lots of checks and balances already in place.

You have auditors, rating agencies, and many traditional finance controls. Regulation is generally good because it gives clarity on what is needed, including trust accounts and insurance. That clarity is needed.

Avinash Chidambaram: We are regulated and registered under a number of frameworks, and we follow all the rules. That creates a lot of rules and cost for a country with 40 million people.

But if we back up to the stablecoin framework the government announced, nobody is saying they do not want to follow that framework. We obviously want to secure stablecoins. We want to make sure stablecoin issuers are not misusing those funds.

There is already agreement that customer funds need to be secured separately and backed by high-quality liquid assets, such as short-term treasuries. There are examples of that regulation in the U.S. and consequences when rules are not followed.

Canada now needs to move forward the way Europe, Singapore, Hong Kong, China, Indonesia, and other jurisdictions have put frameworks in place to protect end users. We have a framework, but regulators still need to write the rules.

Vladimir Shatiryan: Brian, given where you are with ATB, larger Canadian banks are subject to OSFI supervision, FINTRAC regulation, audited financial statements, and deposit insurance coverage. Is there a gap in the framework if a stablecoin issuer makes a mistake and users do not have the same level of protection?

Brian Ford: The regulations are evolving.

What we have done is build trust accounts with regulators nationally, in Ontario, Quebec, and Alberta, that protect the fiat reserve cash in the case of bankruptcy. We are the only bank that has it, and we built it together with the regulators to protect the fiat or cash sitting in the bank account.

That exists not just for stablecoins, but also for exchanges, custody, and any fiat that is protected in a trust account. It is the same kind of trust structure you would have for lawyers’ trusts or real estate trusts.

That does not mean there is no risk. You see lawyers dip into trust accounts. You see real estate actors dip into trust accounts. That risk exists. The checks and balances with regulators and regular attestations are important.

We have it protected from a bankruptcy perspective, which was really important for banking the industry.

For stablecoin issuers, we would hold the currency backing the stablecoin either in cash that sits in a protected bank account or in fixed income Canadian securities. That matters because some issues in the U.S. happened when assets were not held in fixed income or cash, but in things like Bitcoin, which creates fluctuation.

The stablecoin legislation is important to create the framework. It does not eliminate the possibility of abuse, but that exists everywhere in banking. The other thing we do is use technology. We monitor the blockchain, monitor transactions, and monitor reserve accounts every day.

As the large banks move into this space, they will need to use technology and blockchain monitoring. It is critical to bank the space.

Vladimir Shatiryan: How should Canada position itself so that innovation in this space is welcomed here? Is the stablecoin legislation encouraging more issuers to come to Canada and issue stablecoins in Canadian currency, or is it an impediment?

Avinash Chidambaram: Every financial services company, bank, and fintech has a stablecoin strategy. This is not a matter of waiting for regulation because it is already happening right now.

We process billions of dollars in cross-border transactions out of Canada and the U.S. Everyone is moving toward the stablecoin framework that has been established, and we do not have to look far to see how this is settling around the world.

You cannot invest in risky assets to back your stablecoin. You need rules to make sure there is safety. Banks are also making a push into the space because the technology benefits are obvious.

Brian Ford: Tokenization is the next phase. Stablecoins are probably where Bitcoin was 10 years ago. Bitcoin is now established as an asset class and investment product. Stablecoins are at that earlier stage today, and tokenization is at the infant stage.

Tokenization is massive, whether in capital markets or other areas.

Stablecoins also matter for digital sovereignty. In the banking and financial system today, U.S. dollar cash is about 49% of cash and is the dominant reserve currency globally. But when it comes to stablecoin volumes, 99% is U.S. dollar.

That would be like walking into a Canadian bank branch and being told they do not have Canadian dollars, only U.S. dollars. That is what the stablecoin world looks like today.

All countries need a stablecoin. It is about digital sovereignty. Cash is legacy going forward. The future is digital, and Canada needs a Canadian digital dollar. That is what a Canadian-dollar stablecoin provides.

Jason Tong: Brian put it well. It is about sovereignty. If people are transacting in U.S. dollar stablecoins, that is essentially U.S. dollars sitting in treasuries. That does not help Canada. A Canadian-dollar stablecoin is needed. We are moving slowly, but we are getting there.

Vladimir Shatiryan: To wrap it up, what are your thoughts on the Stablecoin Act not covering bank issuers and the restriction on interest and yield?

Brian Ford: It is a gap.

We work with regulators closely, and we have made clear that they need to provide guidelines. I am a big believer in access to banking. I want everyone to have access to banking.

The regulations need to be clear for banks so that Canadian banks know what they can and cannot do. It is clear for custody providers, stablecoin issuers, and exchanges. It is not clear for banks.

That matters because some of the world’s largest banks are Canadian banks. It is a severe disadvantage if the Ministry of Finance and provincial regulators do not clarify how this works.

Whether it is Citibank or JPMorgan with JPM Coin, others are already moving quickly. It is a disservice to Canadians if we do not get that clarity soon.

Here are 10 key insights from the panel:

1. Stablecoins are already solving real payment problems
Panelists emphasized that stablecoins offer near-instant settlement, transparency, low cost, and finality, making them useful for cross-border payments, merchant acceptance, and other financial use cases.

2. Real-Time Rail may not be the endpoint of payments modernization
While RTR can improve domestic payments, panelists argued that stablecoins may leapfrog traditional real-time rails in some use cases because of lower cost, broader programmability, and global reach.

3. Cross-border payments remain one of the clearest stablecoin use cases
Stablecoins can bypass correspondent banking chains, reduce settlement time, and lower the cost of moving money across jurisdictions.

4. Domestic stablecoin use cases are emerging quickly
Retail payments, merchant settlement, corporate treasury, micropayments, agent-to-agent payments, and tokenized investments were all identified as potential domestic use cases.

5. Merchant economics could drive adoption
The panel highlighted the gap between traditional card interchange costs and much lower stablecoin transaction costs as a major incentive for retailers.

6. Stablecoins and RTR can coexist
Panelists did not frame stablecoins as replacing every rail, but as one more payment option that may be better suited to specific cost, speed, settlement, and programmability needs.

7. Trust depends on reserves, attestations, and safeguards
The discussion emphasized the importance of high-quality liquid assets, trust accounts, regular attestations, audits, and clear reserve rules to protect end users.

8. Banks need clearer rules for stablecoin participation
Panelists noted that regulation is clearer for issuers, custodians, and exchanges than for banks, creating uncertainty for Canadian financial institutions that want to participate.

9. Canadian-dollar stablecoins are a digital sovereignty issue
With most stablecoin activity denominated in U.S. dollars, panelists argued that Canada needs Canadian-dollar stablecoin infrastructure to avoid relying entirely on foreign digital money.

10. Tokenization is the next major phase of digital finance
The panel positioned stablecoins as an early foundation for a broader tokenized financial system, including real-world assets, capital markets, treasury, and future programmable finance use cases.

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