Stablecoins are moving from industry buzzword to strategic priority. With new regulatory clarity emerging, such as the GENIUS Act, banks now face a critical question: is your payments infrastructure ready to compete?
In this Leaders episode, Manish Gurukula, CEO of Alacriti sits down with Janet King, SVP of Content Strategy at American Banker, to share his expert perspective on the strategies banks should consider when preparing for what's next in payments. The conversation explores:
- The current state of the market and the impact of evolving policies and regulations
- How the shift toward digital money introduces new competitive pressures
- Why supporting stablecoins requires broader infrastructure changes
- How orchestrated payments architecture enables flexibility across payment rails
- Key strategic decisions leadership must evaluate to simplify complexity and prepare
For bank leadership, the central question is no longer whether digital assets will matter—it's whether your payments infrastructure is strategically prepared to capture the opportunity.
Transcription:
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.
Janet King (00:08):
Hello, everyone, and thanks for joining us today. I'm Janet King, Senior Vice President of Content Strategy at American Banker, and I'll be your host for today's leaders episode. Recent regulatory developments like the Genius Act have reduced uncertainty and created a clearer framework for Stablecoin participation, but it's left some bank leaders wondering if their payments infrastructure is ready to embrace the shift. The question is no longer whether digital assets matter. It's really whether banks are structurally prepared to capture the opportunity. Joining me today to discuss what a more flexible future-proof money movement ecosystem looks like and the strategies that banks should consider is Manish Gurukla, CEO of Alacriti. Welcome, Manish. Thank you so much for joining us.
Manish Gurukula (00:53):
Hello, Janet. Thanks for having me here.
Janet King (00:55):
It's a pleasure. Before we dive into some of the questions, would you mind taking a few minutes to just talk a little bit about Alacriti and some of the priorities that are shaping your business today?
Manish Gurukula (01:06):
Absolutely. Alacriti, we are a FinTech company specializing in payments. We provide payments infrastructure and money movement technology for banks and credit unions. Our platform or we pay processes payments across multiple payment modalities such as ACH, wires, RTP, FedNow, Zelle, and Visa Direct all through one single unified platform. And in terms of business priorities, there are two critical priorities that we are focused on at the moment. The first on is around extending our platform to provide digital money capabilities for our banks and credit union customers. These initiatives are around how we can actually enable banks to participate in the broader stable coin ecosystem. The second priority for the business is we have identified AI as a strategic priority. So we are incorporating AI into every facet of our platform and technology. This is from ... We'll be launching products in the area of fraud prevention, payment operations, reconciliation.
(02:34):
Those are some of the areas that we are actively investing in from an AI perspective. And if you think about it, these two are actually interconnected in the sense it's around a strong conviction that financial institutions who have a modern payments infrastructure would be the ones who will be better positioned to support the needs of their customers today as well as the needs of their customers tomorrow, especially with the agentic era that we are all about to get into.
Janet King (03:06):
Absolutely. You are certainly sitting at the center of it all. There's a lot happening. So I want to start by opening up with a policy conversation because as I mentioned at the start, the Genius Act has really created a more favorable stance that combined with the White House attitude towards innovation and some of the digital assets policy has really created regulatory clarity, but it's also given us a little bit of a pro innovation bias, I think. So what's actually changed for banks since the Genius Act and what can they realistically do today that they couldn't do 12 to 18 months ago?
Manish Gurukula (03:44):
That's a great question. So about 18 months ago, if a bank wanted to participate in the Stablecoin ecosystem, they had a lot of ambiguity just around the regulatory framework. What kind of products could I offer to my customers? Can I offer a yield product or how the examiner is going to ... What kind of reporting requirements does my institution have to support from an examiner perspective? And with all that ambiguity, it was fair on the bank spot to actually wait it out. And the Genius Act has actually changed that in a lot of ways. Firstly, it defined what payment Stablecoin is. And second important thing is it actually established a supervisee framework for how Stablecoin products and those transactions need to be screened, monitored, and what the examiner is going to look for, what kind of compliance requirements that the banks need to meet around those.
(04:59):
And the third and really important distinction is that only regulated financial institutions such as federally charted banks, credit unions, and approved non-bank issuers are the only ones that can actually issue a payment stable coin. The third one is a very important ... In my mind, that's a legal or a competitive mode that regulated financial institution have that they will be able to effectively compete with others in the market right now. All of these things combined together I think has provided a lot of clarity and removed that ambiguity that folks had about 18 months ago. Right now, an executor at a bank or the CEO could have a conversation at a board saying that, "Hey, here are the list of products that we think would be appropriate for our customers. Here's how the examiners are going to be looking at stable coin transactions and here's the compliance architecture for it.
(06:04):
This kind of conversation was just not possible about 18 months ago. And the last thing I also want to add is that the deadline around implementation, which is December 2026. So those forward thinking institutions who already have identified or decided that they're going to play in the Stablecoin ecosystem, they have a first mover advantage, especially if they're going to do pilots later on this year, they will have the advantage of going through the first examination cycle and they'll also have the operational know- how around what the regulators look for and all the aspects of things that they need to take care of to roll out Stablecoin products effectively for their customers.
Janet King (06:53):
Absolutely. And that clarity is certainly accelerating the conversation and those initiatives at those banks, but a lot of people are still kind of talking about Stablecoin or framing Stablecoin, I guess, as just another rail. So why is that problematic? I mean, I guess I'd like to know where does that thinking breakdown in practice and what do banks really underestimate when they take that view? Yeah,
Manish Gurukula (07:17):
I think that entire framing of Stablecoin is a rail understates the importance of infrastructure change that is needed and that leads banks into a path where they significantly underestimate the complexity of what's involved in implementing a Stablecoin use case or a Stablecoin product. And let me just expand on that. So if you take a scenario like if a bank is adding RTP or FedNow capabilities on their platform, the underlying asset is US dollars and the compliance framework for screening US dollar transactions very much exists today, whether it's with ACH or wires and the same thing could be expanded to an RTP or FedNow. If you switch the context and you talk about Stablecoins, the underlying asset is really not sitting in your core banking infrastructure. It doesn't live in your core banking infrastructure that actually lives on a public blockchain and you've got to deal with a USDC transfer has got wallet addresses on both sides of the transaction.
(08:34):
So how do you screen for these wallet addresses in real time? What kind of compliance framework actually governs these kinds of transactions? All of those things are very unique to the Stablecoin context and then you've got things like reserve attestation. So for every Stablecoin, you need to have an equivalent liquid assets as reserves. How do you support those kinds of requirements? And then the banks also need to have partnerships with institutional custodians and they need to have real-time data feeds from those custodians and ability to generate examiner-ready reporting, real-time reconciliation. All of those things are very, very important and very unique to the context of Stablecoins, which takes the conversation much beyond a rail. Now, if expanding that, if a financial institution also wants to offer a digital dollar account alongside a checking and savings account, then you get into the complexities of can your existing core banking infrastructure actually support that or do you actually need a shadow ledger technology to support that kind of transaction?
(10:00):
So there's a lot more that goes into all of this stuff and it's much beyond just a rail implementation. It's not as straightforward as just another rail.
Janet King (10:12):
Right. It's a very complex conversation, which leads me to the next question about legacy systems and where we're actually seeing those breaking today. And I guess more specifically, what is the first thing that fails when a bank tries to support a real-time or digital money use case?
Manish Gurukula (10:30):
Yeah. So what we have seen by implementing RTP and FedNow for a lot of our customers is that the first area is the core banking infrastructure. As we all know, most of the core banking infrastructure has been running for decades as all legacy technology. In most cases, it's fragmented across the banking ecosystem and most of these core banking systems have been designed with batch processing in mind. So they were never designed for real-time processing and stuff. So what happens today is these core banking systems have to actually go offline in the night for schedule maintenance when these batch jobs run. So the limitations from a financial institution perspective is how do I make sure that I'm able to, a real-time transaction that's coming that I'm receiving from an RTP or FedNow network, how do I comply with availability requirements seven by 24 always on architecture that these networks expect out of financial institution.
(11:40):
That's one area clearly there are a lot of challenges. The second related area is BSA, AML and sanction screening software that banks use today. Again, these are also in most cases, legacy technology. And when you have real-time systems, you want to be able to screen transactions in real time. So you've got latency issues with these systems that cannot screen transactions in real time. What we have seen implementing RTP and FedNow for institutions is most of these platforms have put some sort of a temporary wrapper on top of the platform to support real-time workflows and stuff, but those are all some of the bottlenecks and this thing. The third critical piece from an infrastructure perspective is fraud or fraud prevention. So a real-time transaction requires you to score fraud or a potential fraud in a real-time basis and none of these platforms are able to support that today.
(12:57):
So again, even around the fraud prevention platform, we've seen some temporary wrappers that are built. So those are all some of the limitations. And the last thing coming back to the core is if a bank wants to offer a digital dollar account alongside a checking and savings, can I actually support it? Can my core banking infrastructure actually support that? Now, do I need a shadow ledger platform that sits alongside my core to actually support that? So these are all some of the practical challenges with the infrastructure that we have today.
Janet King (13:37):
So can you speak a little bit to what banks need to be addressing first as they start to look at some of those challenges? What's the right sequence of investment?
Manish Gurukula (13:51):
First of all, I think the operating principle here is not to rip and replace, but to extend. So a lot of banks have already been on a modernization journey. So many of them, especially with RTP FedNow and recently wires moving onto ISO 20 or 22 standards, many of them have already made a pretty significant progress in terms of their modernization path. So from an infrastructure perspective, if a bank already has a payments infrastructure that's based on ISO 20 or 22 data models and all of that stuff, that's a huge plus. From a stable coin or digital money capability perspective, everybody should be approaching it from how do I extend my payments infrastructure by adding a programmable money layer on top of my payments infrastructure. So from a technology and architecture perspective, a couple of key components here. One is a programmable money bridge, which is a token agnostic, which can connect the fiat world with the digital asset world and something that can actually support USDC today, tokenized deposits, as well as something that is easily extended to whatever standards that emerge tomorrow.
(15:24):
The second one is the ability to support a USDC account alongside a checking or a savings account. And third important thing from an architecture perspective is a compliance architecture that is actually purpose built for the Stablecoin context. So I would say these are all really important. And then from a platform perspective, ideally you would want to have a centralized orchestration engine that can process payments across all payment modalities. So RTP, FedNow, Stablecoin related transactions, ACH wires, all of that stuff, because as a financial institution, you get a lot of benefit in terms of centralization of processing, you can manage your fraud and operations, all of those things in a much, much better fashion.
Janet King (16:25):
Okay. So that's a lot to think about. Is there anything else that banks need to be thinking about as they think about modernizing their payments infrastructure to really capture all those, not only today's existing use cases, but what might be coming around the corner?
Manish Gurukula (16:41):
I would say I think the ones that I touched upon are the important things, I think. Yeah. And then if you've got latency issues around your fraud prevention systems or sanction screening, those are some other areas that you should potentially look into.
Janet King (17:11):
So let's talk about competitive pressure because as Stablecoins and digital money really evolve, where do you see that competitive pressure showing up first? Is it in the customer experience? Is it in speed? Is it in the economics of the whole thing?
Manish Gurukula (17:26):
I think it's in all three dimensions,
(17:29):
But in specific sequence, customer experience, economics and speed, I would say. So let's take customer experiences as the first one, FinTechs, Robinhood, Coinbase, all these guys, they do a pretty good job in terms of delivering outstanding customer experience and they've set a very high bar from a customer experience standpoint and customer engagement standpoint. So for banks to effectively compete with them, you either have to provide a similar kind of experience or you have to provide a much better experience than that. And if you look at some of the high yield products that Coinbase and Robinhood offer today, if I as a consumer have $10,000 sitting at my bank and I'm only earning 0.15% interest in a money market account or a savings account, whereas or Robinhood or a Coinbase is offering a four or 4.5% for my balances, then I would naturally want to move money there.
(18:36):
So the deposit displacement problem is real, it's happening.
(18:45):
Let's just take an example of a financial institution that's losing $50 million in deposits to FinTech wallets. If this financial institution has to replace that $50 million in deposits, they get money at wholesale rates of something like 4.5%, you're talking about an annual cost of 2.25 million that this financial institution has, which they didn't have a couple of years ago. This has got direct impact on their deposit retention, margin pressures, so on and so forth. But the most recent important stat came out in a study from FIS, which actually said that 74.8% of consumers would feel comfortable in trying out a Stablecoin product if it was offered by their primary bank was only 3.6% of consumers would actually try that from an unregulated institution. That particular stat should actually say it all. So the demand is there and the opportunity is there and the time to act is now.
Janet King (20:02):
Right. And that really speaks to the trust that consumers have in their banks and the importance of trust in those relationships. So banks do have an advantage there. So let's talk about how you build a business case for that because given the investment that's required to support Stablecoins, I think a lot of financial institutions are looking to build a really strong business case that can support and pursue their modernization. So can you provide any examples of how banks can monetize digital money use cases and create new revenue opportunities?
Manish Gurukula (20:36):
Yeah, I think there are a couple of areas of monetization that are still emerging in the market and we could see that from what Coinbase and others are doing. The first one is the conversion spread. So from converting fair dollars to a USDC and vice versa. And the second monetization opportunity is around high yield a digital dollar account. Let's say if a financial institution wants to offer a USDC account that sits alongside a checking and savings account and they're able to offer compelling economics similar to a Coinbase in this thing, then the potential revenue opportunity is around net interest margin from offering those USDC accounts to their customer. And the third monetization opportunity exists or is around cross-border payment flows. So today about $150 billion of remittances are from originating from the US and most of these remittances have an FX margin of three to 5%.
(21:59):
So there is an opportunity to optimize the cross-border payment flows for consumers and businesses and at the same time monetize those transactions from an FX spread perspective.
Janet King (22:11):
Okay, great. All right, if you want to boil that down into some practical advice for the banking leaders who are listening today, what do you think are two or three decisions that those leadership teams really can't afford to delay over the next, let's say, 12 to 18 months? If they want to be ready for stable coins in digital money, even if they're not fully prepared to commit to a strategy right now, what should they be thinking about? What are those decisions that they need to tackle?
Manish Gurukula (22:42):
Great question again. So the first one would be the executives need to engage with an experienced regulatory council to get guidance on the specifics of the requirements under the Genius Act, what kind of partnerships they need to have, what kind of compliance architecture that they need to have, what are the reserve requirements, all of those things. So just getting a really good regulatory guidance around some of the products and use cases that they think are appropriate for their customer base would be the very first step. The second one is an audit of their infrastructure. And what I mean by that is if a financial institution wants to offer a USDC account, does my current infrastructure support that and what are the gaps like, can I extend my core banking infrastructure to support a USDC account or do I need a shadow ledgering component? Are my current AML, BSA and sanction screening systems, are those extensible easily to support my Stablecoin use cases?
(24:10):
Same thing with fraud. So that's number two. And the third and the most important one is just the decision itself identifying this as a strategic priority at a board and a CEO level and just putting some serious dollars and investment behind it.
Janet King (24:33):
Okay. So to recap that, they need to have access to regulatory guidance. They should be auditing their infrastructure and they should make sure that they have some level of commitment from clarity around this priority as a strategic priority for the business. Okay. So this might be a little duplicative this question, but I'm curious if we think about who's leading and who's lagging here, what do you see as the biggest differentiators for the banks that are really prepared for this shift versus those that are not?
Manish Gurukula (25:05):
I think the banks that are uniquely positioned to capitalize on the opportunities are those that have made a significant progress on their modernization journey. So for example, a bank that already has modernized their infrastructure and they have ISO 20 or 22 infrastructure, payments infrastructure, they're processing RTP and FedNow and those they're in a much better position because they can easily extend those platforms to support Stablecoin related use cases. And these are also banks that actually see the FinTech disinradiation threat and a deposit displacement problem and all of that stuff. And they also have a good idea on their Stablecoin strategy and they've already started working on those initiatives and stuff. When it comes to banks who are unprepared, I think within the banking system, we see this with every wave of innovation. There are folks who actually are still waiting for regulatory clarity around the various aspects of Stablecoin products.
(26:24):
And there are also financial institutions who have a lot of legacy platforms who would fall under this category, which would make it challenging for them to extend their platforms to easily roll out new products and services. So I would say those would be the category of banks that would fall into the unprepared category.
Janet King (26:45):
Right. They're going to need to catch up a little bit. So how can Alacrity help them bridge that gap?
Manish Gurukula (26:51):
So from an Alacriti perspective, a couple of things we are doing, like I said, we are extending our platform to add digital money capabilities. So these are a couple of products that are going to be available to our customers for our existing customers who are already using some of the capabilities from the platform, whether it's RTP or FedNow or Wires or this thing, it's an easy upgrade for them to support digital money use cases on our platform. In addition to that, we are also launching design partner program where we are going to be inviting financial institutions to participate in the program and play an active role in defining the roadmap for these digital money products. Thank
Janet King (27:39):
You, Nish. Do you have any final thoughts before we close this out?
Manish Gurukula (27:42):
Sure. I mean, what I would ask of every leader listening today is tell us what you need to be true from a regulatory, operational and a product standpoint for your institution to move seriously in 2026. We want to partner with you and we want to build it with you.
Janet King (28:03):
Excellent. Well, thank you so much for joining me today and for sharing your perspective. I think you really helped us break down what's a really complex and fast moving area, I appreciate you being here.
Manish Gurukula (28:14):
Thank you, Janet. Thanks again for having me here.
Janet King (28:16):
It's been a pleasure. And thanks to our audience for joining us today and I hope you'll join us for future episodes of leaders on American Banker.
