By Rose Oswald Poels, WBA president and CEO
Our industry continues to be in lockstep fighting policy battles that are shaping the regulatory framework for the payments system — namely the GENIUS Act and the CLARITY Act. Together we have been advocating to protect against non-banks being able to offer interest, rewards, or yield that could impact access to credit for our customers. At the same time, like you, WBA has been closely watching the emerging landscape around stablecoins, tokenized deposits and assets, and programmable payments built on blockchain technology.
With the support of the WBA Board, I’m pleased to share with you that WBA is uniting with 39 other state bankers associations across the country to take measures to proactively position our industry as the future of commerce and banking continues to evolve in the digital payments space. WBA joined the BankChain Alliance, a highly secure network on a common banking platform (blockchain) that allows financial institutions to access programmable (or smart) payments within a secure and regulated environment, enabling both tokenized deposits and stablecoins. We are working to provide a regulated alternative, enabling modern programmable payment capabilities that support local lending capacity to the benefit of member banks and your customers across Wisconsin. An article on the BankChain Alliance was published by American Banker just this morning.
WBA is taking this important step to ensure that when you are ready — you will have the ability to offer programmable (or smart) payments within a secure and regulated environment that protects customers from potential fraud. This approach preserves local lending and reduces dependence on external vendors for access to modern payment technology.
There are some banks that are further along in exploring this technology and may be participating in other networks. This is designed to be additive, allowing for interoperability to existing networks. This will allow banks to support as many customers as possible that transact with other banks across the country.
The network is designed by bankers and currently owned by state bankers associations. There will be opportunities for banks to also invest in BankChain Alliance.
While it is still being developed, the governance model mirrors the Federal Home Loan Bank governance model giving both community banks and large banks an equal voice, with day-to-day executive oversight still being determined.
BankChain Alliance is currently going through a request for proposal process to select the right technology partner and platform. The RFP is built around key principles such as fairness for banks of all sizes, accretive by nature creating value for participating banks, providing bank-grade security, and innovation that unlocks new ideas and simplicity to enable easy integration.
As the network continues to evolve and work towards an official launch, more information will become available for bank participation and investment opportunities. I welcome your feedback, questions, and comments on this rapidly developing space. WBA is excited to be part of this digital payments journey alongside our members!
