What Digital Dollars Mean for Treasury and Payments
Todd Klapprodt joins the podcast to provide a practical primer on stablecoins, tokenized deposits, and other digital assets—what they are, why commercial banking is paying attention, and how financial institutions can explore use cases safely.
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Cheryl Brown
Hello and welcome to The Purposeful Banker, the commercial banking podcast brought to you by Q2, where we discuss the big topics on the minds of today's best bankers. I'm Cheryl Brown. Welcome to the show.
Today, I'm welcoming Todd Klapprodt back into the studio. Todd's a senior product manager here at Q2, focused on innovation in the commercial banking space, specifically our suite of open banking products, which we call Direct Data Services. And he also focuses on new payment technologies. So Todd, welcome to the show.
Todd Klapprodt
Thanks, Cheryl. Excited to be back on the podcast and talking about stablecoin and innovation in the payment space.
Cheryl Brown
So yeah, faster payments, that's a keyword we're all listening for these days. And for the past year or so, at least, we've been hearing more and more chatter in the market about how digital assets like stablecoins may be a smart way to help commercial and corporate clients do things like make cross-border payments easier, simplify B2B payments, etc. So that sets the stage for why we're talking about this today.
But first, let's step back and level set. So we can all be on the same page, when we talk about digital assets, what's the cleanest way to separate crypto, stablecoins, tokenized deposits, all the different words that we hear? How do we separate those?
Todd Klapprodt
Thanks. And I think that's an important place to start, Cheryl. As I think … Like many other people, I was first introduced to crypto years ago when Bitcoin and Ethereum kind of first burst onto the scene. And we heard concepts like blockchain and decentralization. But over time, crypto has really become a catchall term. And I think that's where some of this confusion really creeps in. The reality is, especially as we start to think about stablecoin and tokenized deposits, not all digital assets are the same. We're really talking about three very different things that, for too many reasons, are lumped together.
So first, crypto assets—talking about Bitcoin and Ethereum—these are digitally native assets. They're not dollars. They're not issued by a bank. And really, they fluctuate in value. That's really what they're known for. These are primarily viewed as investment or speculative assets.
Second, we've got stablecoins, and that's obviously where we'll spend the bulk of the time today. But these are digital tokens pegged to a currency like the U.S. dollar, but obviously that's domestically, and in other countries are going to be pegged to that currency. But they're not bank deposits. They're liabilities of the issuer.
And third, we have tokenized deposits. And these are interesting because tokenized deposits, it isn't a representation of money. It's actually the money. It's currency. It's a real bank deposit simply moving on modern rails like the blockchain infrastructure.
Cheryl Brown
So yeah, great. Thanks for that primer because I'm sure I'm not the only person who gets confused by all the different types of digital assets. So what has changed in the past 12 to 18 months that's made stablecoins more relevant to commercial banking conversations?
Todd Klapprodt
Yeah. It seems like a lot has changed in the last 12 to 18 months. But I think the biggest thing that has happened is stablecoins have moved from being kind of a crypto market tool to one that's being discussed actively in the context of real payment infrastructure. And I think there's three things that really shifted the conversation in general, that are really driving this.
The first is the regulatory clarity's really starting emerging. We've seen much more serious engagement from the regulators and policymakers alike, not just in the U.S., but globally. And I think for that reason, stablecoins are no longer viewed as a fringe experiment. They're being discussed in the context of payment systems, settlement, and even dollar competitiveness.
And just to pause there for a second, as we talk about regulatory clarity, we have to talk about the GENIUS Act. And for those not familiar with it, GENIUS stands for Guiding and Establishing National Innovation for U.S. Stablecoins Act. And it really elevated the conversations around stablecoin because it created a clear set of federal guidelines and a framework for how stablecoins can be issued, backed, audited, and ultimately supervised. And at the end of the day, that's the type of clarity that we ultimately need before institutions get comfortable engaging with this new kind of capability or building, more importantly, building on top of that stablecoin infrastructure.
The second thing that happened, I think beyond obviously the regulatory clarity, is we've seen a whole lot of actual transaction volume and seen several use cases really emerge. Stablecoin volumes have grown significantly over the last couple years, but if we look at 2025, in total, we see about $33 trillion in volume, which represents about a 72% year-over-year increase. And that's split out—there's really two main stablecoin providers, USDC and USDT. And that volume's expected to go to $56 trillion by 2030.
And to put that in perspective, if we think about that, that's comparable to some of the settlement volume that you see in large major payment networks like Visa. So it's kind of hard to ignore. So I think an important nuance here is it's become about utility now. It's not about speculation as we think about stablecoin.
And kind of the last thing I think that really drove stablecoin to the forefront of the conversation is this notion of 24/7 settlement expectation. Commercial clients are getting far more sophisticated and are starting to expect their money to move instantly and around the clock, just like their data does. And that's, I think, one of the things that stablecoin brings to the table is that the demonstrated value can move 24/7 on programmable rails. And if you're one of the existing payment rails infrastructure, that's a wake-up call.
So I think the question really becomes for FIs and banks, should we become crypto companies? Which really isn't the question. It's really, how do we stay central to money movement as the rails evolve? And that's where the conversation really shifts from like the speculation to infrastructure. And I think that's where Q2 really comes in. As we think about this and have watched the last 12 to 18 months evolve, we realize that we're in a good place to help financial institutions modernize their digital banking and payment capabilities so they can remain competitive as those rails mature.
Cheryl Brown
Yeah. So it sounds like it's a perfect storm of several things coming together that has really brought this to the forefront of why financial institutions are even thinking about stablecoins right now.
So you mentioned use cases. Are there some more practical use cases that you'd point to first? What areas would banks … do you think they should focus on first?
Todd Klapprodt
Yeah. Once again, it's a good question, and I think there are definitely some practical use cases here that can really help shift this conversation from experimental to a strategic one for banks. And there are three—and it's funny, I just realized there's a lot of threes in here—but basically there are three things that have kind of jumped out.
The first, and I think this is the most obvious and most often kind of spoken about and pointed to, and it's cross-border payments and treasury. So prior to stablecoin, cross-border payments are slow, expensive, and often opaque, right? So you don't have a lot of transparency into where they are if something goes wrong. Stablecoin rails enable near real-time settlement 24/7 with the improved transparency like we just talked about. And for a commercial client managing global treasury operations, that's a compelling story and a compelling reason, especially when the liquidity timing matters and it matters a lot.
So why do banks care about that particular piece? Well, there's a few, right? Commercial clients, they're asking for faster global money movement. And I'd also kind of argue that in some cases it's cheaper. It's a competitiveness issue, right? If we don't offer it, maybe my competitor down the road is. And ultimately, it's a fee and relationship retention issue. Once again, I think the competition is going to start to offer this and there is opportunities for fee there and to kind of deepen your relationships.
The second use case that we kind of are seeing and hear about are this notion of 24/7 settlement liquidity management, and I would even say 24/7/365. So the traditional banking infrastructure largely operates on business hours, which can be frustrating, whereas blockchain-based rails operate continuously. And as businesses become more digital and global, they expect that money to move quickly, and as I mentioned earlier, the same way that data does instantly and around the clock.
So why does this matter to FIs? And once again, corporate clients expect modern settlement capabilities. And fintech competitors are already offering this 24/7 capability. So really, it's about staying relevant in the world of real-time finance.
So the third one here, I think, that to me starts to get exciting and opens up some very interesting opportunities in the future is this notion of programmability and embedded finance. So programmable money opens up all sorts of new possibility that you can imagine, right? Conditional payments, automated escrow, real-time reconciliation. And for certain industries, that's more valuable than speed. It's operational efficiency.
And why do banks care about that one? Well, I think, as I just mentioned, operational efficiency. It has the potential to significantly reduce reconciliation friction, allows for all sorts of interesting working capital optimization. And then you can imagine, apply this to different verticals and different types of organizational structures, but industry-specific automation starts to become very possible with this type of capability. So yeah, the use cases are really exciting, but those are the most three compelling that I'm seeing so far.
Cheryl Brown
Yeah. And looking at the first of those two use cases, cross-border payments and 24/7 settlement, and you relate these to the corporate client or the big commercial client. Are we also seeing that this is moving downstream where small businesses and even sole proprietors are now doing cross-border payments? Cross-border payments is such a part of just business, no matter how big of a business you are. So I think a lot of community banks or smaller banks who don't have the big corporate clients, but they do have small business clients and sole proprietor clients, they hesitate to get into things like cross-border payments. But you mentioned that fintechs are making things like stablecoins possible for just about anybody, right?
So do we have a perspective from Q2 on who, which kind of bank needs to be thinking about this? Is it everybody? Is it no matter who you serve? Or at this point, is it really just the banks that serve those big corporate clients?
Todd Klapprodt
It's a great question. And I will say as we kind of step back and look at the adoption and who's ... We just gave some numbers around volume around those use cases. I will say most of that volume does skew to larger corporate customers.
But to that point, if you're a small business, competitiveness matters. And if you found a supplier that's on the other side of the globe who can deliver your services or whatever you need for cheaper, then absolutely I think this makes sense. So they're going to need their community bank to offer this service.
And that's where I think, as we think about how do you start to experiment with this, that's where the role, I think, of a digital banking platform becomes important, right? Banks don't need to just decide whether to engage, right? And obviously how they engage will certainly matter based on their client segments. But they need to think about how to integrate these new rails into their existing digital experiences, to your exact point, right? Treasury services and how they integrate it into the compliance frameworks.
So I think bringing it back to kind of Q2 and where do we fit into this? I think we think the opportunity for us is helping financial institutions of all sizes modernize responsibly. So not chasing the crypto trends, but really ensuring they can support evolving clients' needs.
Cheryl Brown
So how do they dip their toes in? What should financial institutions do first?
Todd Klapprodt
Yeah, that's a good question. It's one that I get a lot. And just to be clear, I think dipping their toes doesn't mean necessarily launching a stablecoin tomorrow. It means building optionality. I think that's a very important word and it's something we're leaning into. So it really starts with understanding where digital asset capabilities could plug into existing treasury management payments and liquidity services.
So kind of with that, then the next step is, well, where are these practical entry points to plug in? So a few that we've kind of looked at or considering are things like enabling commercial clients or small businesses, clients of all size, to view digital asset balances within the context of their digital banking platform. How do we pull in those ledger balances?
Also preparing … FIs need to be thinking about preparing the infrastructure for what does 24/7 settlement mean. Because right now a lot of the settlement happens during business hours. What kind of infrastructure do they need in place to support that?
And then I think third is partnering with regulated providers rather than building everything in house. For us, and this is once again something we're leaning into, regulated providers help you get to market and help you start to understand and take advantage of some of these new capabilities while keeping your initial investment relatively low, but offering that benefit to your client.
And then I think, and selfish plug for Q2 here, I think have exploratory conversations with your digital banking provider, right? And that's where a platform like Q2 really plays a role. We're not trying to turn banks into crypto companies, right? We're helping them integrate new capabilities kind of intuitively into the trusted digital experiences.
So if a bank chooses to work with a regulated digital asset partner like Stablecore, who's a partner that we do work with, the key is orchestration, right? So secure integration, a consistent user experience, and compliance alignment inside of the existing digital channels. So minimize any change management.
The last thing I would say to that is risk and control, right? And the focus has to be risk-managed innovation. So banks need transparency, compliance, controls, and the ability to scale gradually, right? A modern digital banking platform allows them to pilot, learn, and expand responsibly rather than making a binary bet. And ultimately, we think one of the jobs that we're here to do is help those FIs remain central to money movement as the rails evolve and doing it in a way that preserves trust and compliance and that customer experience.
Cheryl Brown
So risk-managed innovation, to me, that says that there needs to be some guardrails. So what risk and compliance guardrails should be non-negotiable in a first pilot, especially for, like, send and receive and cross-border flows?
Todd Klapprodt
Yeah. That's exactly the right question, right? Because the technology is absolutely interesting, but the guardrails are ultimately what makes it viable for regulated institutions. So for any first pilot, especially around the use cases you mentioned, send and receive, cross-border flows, in my mind, there's several non-negotiables, right? And these non-negotiables are really simple. Full AML and sanctions controls, clear issuer and counterparty risk assessment, integrated transaction monitoring, defined exposure limits, and then transparent customer disclosures. And at the end of the day, if those guardrails aren't in place, it's not a pilot, it's a risk event, and your risk and compliance team won't be happy with you. And certainly, we're happy to drill into any one of those in more details, but those are it.
And at the end of the day, I think it's important to kind of realize that innovation can't outrun governance. A successful pilot isn't about moving the most volume. It's about proving that the digital asset rails can operate within the same risk, compliance, and consumer protection frameworks that you already uphold on a daily basis. And that's also where I think digital banking platforms matter like Q2, right? Guardrails can't live in spreadsheets or some side systems. They've got to be integrated into that digital experience and the workflow of approvals, monitoring, and reporting.
So to summarize it there, I think responsible innovation requires infrastructure that connects the new rails to your existing compliance architecture. I don't think that can be ... That's non-negotiable.
Cheryl Brown
So as always, Todd, talking with you has been very educational for me. I always learn so much from you. So thank you for joining me today, but I want to ask you one last thing. If you can sum up in one sentence the advice you'd give to bankers who are interested in offering digital assets to their customers, what would it be?
Todd Klapprodt
I think the one bit of advice or one thing I would leave you with is don't chase the hype, right? Build optionality, modernize responsibly, and ensure that your institution remains central as the rails of money movement evolve. Do that, and I think you're going to be in great shape.
Cheryl Brown
That's a great summary, Todd. Again, thanks for joining me today. I hope we can have you on again soon.
Todd Klapprodt
I would love that. Thanks, Cheryl. I'm a big fan of the podcast, so it's always a pleasure to have a chance to talk about commercial banking.
Cheryl Brown
And that's it for another episode of The Purposeful Banker. As always, you can subscribe to the show wherever you listen to podcasts, including YouTube, Apple, and Spotify, and you can see our archive of podcasts at hub.q2.com/podcasts. Until next time, this is Cheryl Brown, and you've been listening to The Purposeful Banker.