The infrastructure banks and payment institutions use to issue, operate, and settle with regulated payment stablecoins. Built for compliance from day one.
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Payment stablecoins are blockchain-denominated tokens pegged 1:1 to a fiat currency, issued by regulated financial institutions, and redeemable on demand against segregated reserve assets. They enable programmable, 24/7 settlement across digital asset networks without exposure to cryptocurrency volatility.
Under MiCA in the EU, payment stablecoins denominated in a single fiat currency are classified as e-money tokens (EMTs) and require either an e-money institution or credit institution license. Issuers must maintain 100% liquid reserves, provide redemption rights at par, and ensure token holders can always redeem at face value. Equivalent frameworks are active in Singapore (MAS Payment Services Act), advancing in the United States (GENIUS Act), and under consultation in the UK (FCA).
For a financial institution, issuing a payment stablecoin requires more than a token contract. It requires a compliance layer that enforces transfer restrictions, sanctions screening, and Travel Rule obligations at the protocol level, before any transaction settles. Reserve management, redemption workflows, and auditability all need to connect to existing core banking and treasury infrastructure.
Kaleido provides the full infrastructure stack: token issuance and lifecycle management, policy enforcement, institutional custody, and integrations into the payment and banking systems your operations already run on.
Live deployments across commercial banks, central banks, and financial market infrastructures worldwide.
A payment stablecoin is a blockchain-denominated token pegged 1:1 to a fiat currency, issued by a regulated financial institution, and redeemable on demand against segregated reserve assets.
Unlike cryptocurrencies, they do not fluctuate in value. Unlike tokenized deposits, they are backed by reserve assets held outside the issuing institution's balance sheet, and they can be issued by payment institutions as well as licensed deposit-taking banks. The holder's claim is against the reserve pool, not the issuer's deposit ledger.
Payment stablecoins differ from other stablecoins in what backs them, who issues them and how they are regulated. Algorithmic stablecoins use on-chain mechanisms to maintain their peg without full reserve backing, a model that collapsed publicly with TerraLuna in 2022.
Crypto-backed stablecoins like DAI hold overcollateralized crypto assets as reserves, exposing holders to the volatility of the underlying collateral.
Commodity-backed stablecoins are pegged to physical assets like gold, with redemption tied to custody of that commodity.
Payment stablecoins are a distinct category: fiat-backed 1:1, issued by regulated institutions, redeemable on demand, and subject to specific regulatory frameworks (MiCA in the EU, the GENIUS Act in the US).
The GENIUS Act explicitly excludes algorithmic and crypto-backed variants from the definition of payment stablecoin. For institutions operating in regulated financial markets, only payment stablecoins carry the compliance posture required for institutional use.
In the EU, payment stablecoins denominated in a single fiat currency are classified as e-money tokens (EMTs) under MiCA. Issuers require an e-money institution or credit institution license, must maintain 100% liquid reserves, and must provide redemption at par on demand. Transaction volume limits apply above certain thresholds.
In Singapore, issuers require a Major Payment Institution license under the Payment Services Act and must meet MAS stablecoin framework requirements effective August 2023.
In the United States, the GENIUS Act (advancing in Congress as of 2025) establishes a federal framework requiring 1:1 backing, monthly reserve disclosure, and Federal Reserve oversight for large issuers.
Kaleido's policy engine is configurable to meet the compliance obligations of any jurisdiction, including AML/CFT, Travel Rule, and jurisdictional transfer restrictions.
Yes. Kaleido supports stablecoin deployment on major public chains including Ethereum, Base, Arbitrum, Optimism, Polygon, Stellar, Solana, and Avalanche, with permissioned transfer controls enforced at the smart contract level. This means the token circulates on public infrastructure while maintaining whitelist-based access, AML screening, and jurisdictional restrictions required for regulated use. Kaleido also supports private permissioned chains (e.g. Besu, Canton, etc.) for use cases where complete network control is required.
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Kaleido's policy engine enforces transaction rules before signing, covering counterparty identity, sanctions screening, value thresholds, velocity limits, and jurisdictional restrictions. Native integrations with Notabene (Travel Rule) and Chainalysis (AML) are built in.
Every signing event is cryptographically logged with a complete audit trail accessible to regulators. Compliance rules are configured by the client institution, versioned, and deployable without redeploying the token contract, so regulatory updates do not require a full reissuance.
Kaleido's Interop Hub connects on-chain token operations to existing treasury management systems, payment rails, and core banking platforms via 1,000+ platform APIs and ISO 20022-compatible messaging. Mint operations trigger corresponding reserve entries. Burn and redemption requests flow through existing payment processing. Every on-chain event reconciles against off-chain records in real time, eliminating end-of-day batch reconciliation and manual exception handling.
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Payment stablecoins and tokenized deposits differ mainly in their backing structure and their relationship to the issuer. A tokenized deposit is a liability of the issuing bank. It sits on the bank's balance sheet and is protected by deposit insurance.
A payment stablecoin is backed by segregated reserve assets held outside the bank's balance sheet, typically cash and short-term government securities. For the holder, a tokenized deposit carries the credit quality of the issuing bank. A stablecoin carries the credit quality of the reserve assets.
For the issuer, stablecoins enable distribution beyond existing deposit customers, are compatible with public chain settlement, and are subject to a different regulatory framework: stablecoin or e-money regulation rather than prudential deposit regulation.
