The five layers making stablecoins usable for banks

As stablecoins move toward genuine institutional integration, Bilal El Alamy, Co-Founder and CEO of Pyratz Corp, shares the five layers that make these digital assets usable for banks.

For most of the past three years, the honest answer to whether stablecoins were ready for genuine institutional integration was: not quite. That answer changed in 2026. Regulatory clarity arrived across multiple major jurisdictions simultaneously, settlement volumes crossed thresholds that moved compliance functions from observer to principal, and strategic acquisitions signaled that the largest payment infrastructure providers had placed their bets. The five infrastructure layers below represent what Pyratz, as a builder and investor in this space, tracks as the foundation of institutional-grade stablecoin adoption.

The acquisition signals are the most direct evidence of the shift. When Mastercard agreed to acquire BVNK at a reported valuation of USD 1.8 billion, the logic was not about issuing a stablecoin but about owning the settlement rails that move them across borders and between institutional counterparties. Stripe's acquisition of Bridge, a stablecoin payment infrastructure company, reinforces the same pattern: card networks and payment service providers are buying rails, not tokens.

The question for financial institutions has shifted from ‘will stablecoins become relevant to us?’ to ‘which companies are building the rails we will actually use?’ From where we sit, the institutional stablecoin stack is being assembled, layer by layer. Five companies represent the clearest evidence of that assembly in progress.

1. Circle - the compliance anchor

Circle issues USDC and EURC. By 2026, it holds the most complete regulatory stack of any major stablecoin issuer globally: an Electronic Money Institution license from France's Autorité de Contrôle Prudentiel et de Résolution covering both USDC and EURC under MiCA (granted July 1, 2024), and a crypto-asset service provider authorisation from the AMF (granted April 2026). Monthly reserve attestations are published and independently verified by Deloitte.

The pain point Circle solves for financial institutions is trust infrastructure. Before a bank, PSP, or corporate treasury can recommend, distribute, or build on a stablecoin, it needs a clear answer to three questions: Is the issuer regulated? Are the reserves audited? What is this token's legal status under applicable law? Circle has done the regulatory groundwork most stablecoin issuers have not. Both USDC and EURC appear in the ESMA register of authorised e-money tokens. Compliance officers have a file they can hand to legal.

Why it matters now: the MiCA full-compliance deadline of July 1, 2026 narrowed the authorised field at scale. Among the ten largest stablecoins by market cap, only USDC holds MiCA authorisation - a structural filter, not a monopoly on compliance. Euro-denominated electronic money tokens hold full authorisation under the same framework: EURCV, issued by SG-Forge and supervised by the Autorité de Contrôle Prudentiel et de Résolution, and EURe, issued by Monerium under AMF authorisation, are both MiCA-compliant. They operate at a smaller scale than USDC, which is the gap the USDC authorisation fills for institutions requiring dollar-denominated settlement in volume. That is a competitive moat built from regulatory positioning, not product differentiation, and financial institutions will increasingly require it of any stablecoin they integrate.

2. Zama - the confidentiality layer

Pyratz is an investor in Zama. Every major regulatory framework now requires stablecoin transactions to be auditable and reportable. Financial institutions are simultaneously obligated to protect client identities and transaction amounts from public exposure. On a transparent public blockchain, those two requirements are structurally in conflict. It is one of the less-discussed but genuinely hard barriers to institutional adoption - and legal or technical workarounds do not permanently resolve it.

Zama is a Paris-based fully homomorphic encryption unicorn building the cryptographic layer that resolves the conflict at the protocol level. FHE allows computation on encrypted data - meaning a transaction can be validated, compliance-checked, and audited without amounts or counterparties being decrypted and exposed. Zama's fhEVM framework brings this capability to EVM-compatible smart contracts, enabling stablecoin systems where settlement details are protected by cryptographic guarantees rather than permissioned access controls.

Why it matters now: as institutional stablecoin programs move from pilot to production, banks need a technically credible answer to how counterparty data is handled on a public ledger. As of September 2026, Zama's homomorphic encryption is in production infrastructure supporting confidential Morpho vaults with institutional counterparties including Bitwise, Wintermute, RockawayX, and Flowdesk, and in at least one private request-for-quote swap. These are DeFi-native deployments - they are not bank core-system integrations or regulated balance-sheet applications - and the path from this infrastructure layer to those use cases remains at the development stage. Regulatory sandboxes and permissioned networks are partial answers.

Cryptographic guarantees are a more durable one.

3. Paxos - the white-label infrastructure layer

Paxos is the regulated backend that allows financial institutions to issue their own stablecoins without building the compliance and custody infrastructure from scratch. Its white-label issuance platform powers PYUSD for PayPal and USDG for the Global Dollar Network - a consortium whose members include Robinhood, Kraken, Galaxy Digital, and Anchorage Digital - with PYUSD issued under Paxos's New York Department of Financial Services trust charter. USDG operates under a distinct regulatory basis: the NYDFS trust charter governing Paxos's US operations is not the same as the Finnish EMI authorisation framework, and the two should not be treated as equivalent by institutions assessing regulatory coverage. SoFiUSD illustrates a contrasting model: it is issued directly by SoFi Bank, N.A. on its own national bank charter rather than through a Paxos white-label arrangement, and represents one of the first stablecoins from a federally chartered US bank settled on a public permissionless chain, launched in December 2025. Paxos holds regulated entities in Singapore.

The pain point: banks want to offer stablecoin-denominated settlement, treasury products, or payouts but lack the regulatory structure and technical infrastructure to issue tokens safely on their own. Paxos removes both barriers. The partner institution manages the customer relationship and the brand. Paxos manages reserve compliance, issuance, and regulatory reporting.

Why it matters now: the GENIUS Act explicitly contemplates insured depository institutions and bank subsidiaries as permitted stablecoin issuers. As federal licensing unlocks bank-branded stablecoins at scale, Paxos is positioned as the infrastructure most likely to power them - having already demonstrated the model works across multiple regulated deployments.

4. Monerium - the SEPA bridge

Monerium is an Icelandic fintech and licensed Electronic Money Institution authorised across the EEA, issuing EURe - a euro stablecoin where each token represents one euro in safeguarded reserves and is redeemable against a named IBAN via SEPA Instant. The token operates across public blockchain networks and can be sent to or received from a conventional bank account in the same payment session, without routing through an exchange.

The pain point: most euro stablecoins require users to exit to a centralised exchange or OTC desk to bridge between on-chain and the banking system. Monerium eliminates that step. An institution using EURe for on-chain settlement can receive SEPA credits, execute on-chain logic, and settle back to a named bank IBAN within minutes. Monerium has also partnered with Cashlink to enable real-time delivery-versus-payment for tokenised securities - a use case that requires the euro leg to be both programmable and bank-native.

Why it matters now: MiCA requires euro stablecoin issuers to hold EMI licenses. Monerium has held its EEA EMI authorisation since before MiCA's implementation. That operating history and compliance record cannot be replicated quickly by new entrants.

5. SG-Forge - the incumbent proof point

SG-Forge is Societe Generale's digital-asset subsidiary and the issuer of EURCV (EUR CoinVertible). It holds an unusual dual regulatory status: authorised as an Electronic Money Institution under MiCA (supervised by ACPR) and as an investment firm under MiFID2. EURCV operates on Ethereum, Solana, and XRP Ledger, with Stellar integration underway.

The pain point SG-Forge addresses is different from the others on this list. It demonstrates that a major incumbent European bank has internalised stablecoin issuance rather than outsourcing it. For other banks watching the space, SG-Forge provides a proof of concept within a regulatory framework they already understand. For institutional counterparties, transacting in EURCV means transacting with a token issued by an entity supervised by the same authority that supervises a systemically important French bank.

Why it matters now: the instinct of most financial institutions is to wait for a peer to go first. Société Générale went first, publicly, with a MiCA-compliant stablecoin from a regulated subsidiary. That lowers the perceived institutional risk for every bank that follows.

The common thread

These five companies are not solving the same problem. That is the point. Circle is the compliance anchor. Zama is the confidentiality layer that lets banks engage on public rails without exposing counterparty data. Paxos is the issuance layer for bank-branded stablecoins. Monerium is the SEPA bridge. SG-Forge is the incumbent proof point.

What we look for at Pyratz is whether a market is assembling the full stack - not just one impressive piece, but the complete set of layers that makes institutional adoption structurally possible rather than aspirational. In the stablecoin space, that assembly is now visible. Regulation, issuance tooling, banking-system connectivity, incumbent validation, and the cryptographic primitives that make a public ledger safe for commercially sensitive transactions: the layers are in place. Regulated, programmably private, and increasingly operational - this is a different market than the one financial institutions were watching two years ago. The argument for waiting has fewer legs than it did.

About author

Bilal El Alamy is the Co-Founder and CEO of Pyratz Corp, a Euronext-listed technology investment and operating firm based in Paris. He co-founded Pyratz in 2021 alongside Thomas Binetruy, building one of Europe's first publicly listed early-stage venture builders focused on frontier technology. Bilal has a background in physics and engineering from Sorbonne University Abu Dhabi and studied at ESCP Europe. He is based in Paris.

 

 

About Pyratz Corp

Pyratz Corp (Euronext Access Paris: MLPTZ) is a technology investment and operating firm with a builder's DNA. Founded in Paris and listed as the first early-stage venture builder on Euronext, Pyratz backs and co-builds frontier-tech companies across deeptech, digital assets, AI, and capital markets. Its portfolio includes the French FHE unicorn Zama and enterprise staking platform Kiln. Pyratz operates across three strategic frontiers: Abundance Engines, Scarce Complements, and Regulated Gateways, and has launched Artificial Lab, its AI-native studio.
More info: https://pyratzcorp.com/