Your Deposits Are Going Digital — The Technology Playbook
Core providers, Sidecars, and alternative pathways for community and regional banks entering the digital asset economy
By: Paul Schaus
May 5, 2026
In Part 1 of this series, we laid out the strategic case: the GENIUS Act is law, the OCC, FDIC, and NCUA are finalizing regulations under statutory deadline, the largest banks are already processing billions daily on tokenized rails, and the deposit disintermediation risk from non-bank stablecoin issuers is quantified and material. The question is no longer whether community and regional banks should engage with tokenized deposits and stablecoins. It is how.
The answer starts with technology. And the technology question, as with every other payments infrastructure shift CCG Catalyst has analyzed, begins with the core.
Fiserv is the furthest ahead among the major core providers. Its FIUSD stablecoin, launched in 2025 on Paxos and Circle infrastructure via the Solana blockchain, is designed to integrate with existing Fiserv software frameworks without requiring major infrastructure changes. Fiserv also secured a Mastercard partnership to integrate FIUSD across Mastercard's merchant network and partnered with the Bank of North Dakota to launch the Roughrider Coin, the first state-backed stablecoin. Fiserv is positioning itself as a full-stack digital asset platform provider across its network of 10,000 financial institution clients, leveraging its Finxact cloud-native core as the underlying ledger for tokenized capabilities.
Jack Henry has taken a partnership approach. In February 2026, Stablecore joined the Jack Henry Fintech Integration Network, opening stablecoin and tokenized asset services to approximately 1,670 banks and credit unions on the Jack Henry platform. Jack Henry also acquired Victor Technologies to strengthen its embedded payments capabilities. Jack Henry's new public cloud-native core, now in beta testing for initial services including account opening and wire processing, was designed with nine decimal positions natively, enabling direct support for stablecoins like USDC without system modifications. Institutions on Jack Henry do not need to overhaul their technology stacks to begin offering regulated digital asset products.
FIS has moved aggressively on two fronts. In mid-2025, FIS partnered with Circle to integrate USDC stablecoin payment functionality into its Money Movement Hub for domestic and cross-border stablecoin payments. Then in April 2026, FIS launched Lyriq, a platform that enables banks to issue, manage, and settle tokenized deposits and digital currencies while keeping assets on their own balance sheets. Lyriq integrates with existing core banking systems, supports 24/7 settlement, includes embedded compliance and audit controls, and is production-ready with seven completed proof-of-concepts. The day after the Lyriq launch, FIS announced Project Keystone with Citizens, Fifth Third, Huntington Bank, KeyBank, and M&T Bank — a bank-owned digital money network that gives participating institutions direct control over issuance and settlement of tokenized deposits. FIS is now positioning itself with both a third-party stablecoin integration layer through Circle and proprietary infrastructure for bank-issued digital money through Lyriq, giving its financial institution clients two distinct pathways into the digital asset economy.
Beyond the three major core providers, the landscape is uneven, and community banks need to understand where their specific provider stands.
Finastra, which serves over 8,000 financial institutions globally through its Phoenix core and Fusion suite, has partnered with Circle to embed USDC directly into its core banking systems. Finastra is positioning its infrastructure as stablecoin-ready, connecting stablecoin flows with ACH, wires, and instant payments through a single processing hub. For banks on Finastra platforms, the integration path exists but is enterprise-focused and may require more customization for smaller institutions.
CSI, whose NuPoint platform is the second most-used core banking system in the United States by bank count, has published a strategic whitepaper on stablecoins and tokenized deposits under the GENIUS Act framework. CSI's cloud-based architecture and CSIbridge open banking APIs provide the technical foundation for fintech integrations, but CSI has not yet announced a specific stablecoin or tokenized deposit product. Community banks on NuPoint should be pressing CSI for concrete timelines.
Temenos, serving over 3,000 financial institutions globally, partnered with Taurus, a digital asset custody firm, to integrate tokenized asset creation, wallet management, and settlement directly into its core banking securities processing. For banks on Temenos platforms, digital asset capabilities are embedded into existing securities workflows rather than bolted on as separate systems. This approach is further ahead than most mid-tier providers.
Thought Machine's Vault Core, a cloud-native platform used by institutions including JPMorgan Chase, Lloyds Banking Group, and Standard Chartered, was designed from the ground up to support tokenized asset-based lending, fiat-to-stablecoin payments routing, and debit cards backed by stablecoin balances. Thought Machine published its infrastructure framework for tokenized finance in 2025 and is arguably the most architecturally advanced platform for digital asset integration. However, Thought Machine's client base skews toward large and mid-tier institutions rather than community banks.
Q2 Holdings, which provides digital banking platforms to community banks and credit unions, has partnered with Stablecore to enable stablecoin and tokenized deposit services through its Innovation Studio. Early adopters include Amarillo National Bank and Bank of Utah. Q2 is not a core processor, but for institutions that use Q2 as their digital banking layer, this integration provides a pathway to digital asset capabilities without replacing their core.
Nymbus, headquartered in Jacksonville, Florida, is one of the few cloud-native core providers built specifically for U.S. community banks and credit unions in the $500 million to $10 billion asset range. PeoplesBank in Massachusetts became the largest U.S. community bank to adopt a modern cloud-native core when it migrated to Nymbus in mid-2025. First Entertainment Credit Union, Michigan State University Federal Credit Union, and several community banks including Algonquin State Bank and McHenry State Bank are also on the platform, with ConnectOne Bank and VyStar Credit Union as strategic investors. Nymbus has over 100 clients and represents the kind of modern core architecture that should be well-positioned for digital asset integration. However, Nymbus has not announced stablecoin, tokenized deposit, or blockchain capabilities. For the growing number of community banks choosing Nymbus for core modernization, the absence of a digital asset roadmap means the sidecar and BaaS models described in the next section become the likely pathway.
The providers that have not yet made visible moves are the ones community banks should be most concerned about. COCC, DCI, Nymbus, and several smaller cooperative processors have not announced digital asset, stablecoin, or tokenization partnerships or capabilities. For the community banks that depend on these platforms, the absence of a roadmap is itself a strategic risk. If your core provider cannot articulate a specific plan for blockchain settlement integration, that is information your board needs.
Community banks whose core provider lacks a digital asset roadmap are not without options. Several alternative models are emerging that allow banks to participate in tokenized deposits and stablecoins without waiting for their core to deliver the capability, or replacing the core entirely.
The sidecar model is the most immediately accessible. Companies like Finzly, which launched its Token Galaxy platform in March 2026, provide API-first middleware that sits alongside the existing core and unifies fiat, stablecoin, and tokenized deposit processing across multiple blockchains. AlphaPoint offers a similar approach, abstracting wallet management, multi-chain routing, and compliance screening through a single API layer designed for institutions that do not want to replatform. These middleware solutions connect to the bank's existing Fedwire, RTP, FedNow, and ACH infrastructure while adding blockchain settlement as a parallel rail. For community banks on cores without digital asset capability, a sidecar platform may be the fastest path to market.
The Banking-as-a-Service model offers another pathway. Stablecore, which raised $20 million in September 2025 with backing from Coinbase Ventures, BankTech Ventures, and Bank of Utah, has built what it describes as a digital asset core that integrates with existing banking cores, digital banking platforms, and technology stacks. Beyond its Jack Henry and Q2 integrations, Stablecore secured backing from the Maine Bankers Association in April 2026, making it the second state banking association — alongside the Texas Bankers Association — to provide structured member access to stablecoin and tokenized deposit infrastructure. Early adopters include Amarillo National Bank and Bank of Utah. For credit unions, the NCUA's February 2026 proposed rule identifies CUSOs as appropriate subsidiary vehicles for stablecoin issuance, creating a cooperative pathway that aligns with the credit union service model.
Direct partnerships with blockchain infrastructure providers represent a third option. Circle, Paxos, Fireblocks, Anchorage Digital, and BitGo all received conditional OCC national trust bank charter approvals in late 2025 and early 2026. These firms can now serve as regulated custodians and settlement providers. A community bank does not need its core to support blockchain natively if it can custody tokenized assets through a nationally chartered trust company and settle transactions through that provider's infrastructure. Circle's USDC has already been integrated into Visa's settlement network, with Cross River Bank and Lead Bank as initial participants. Circle also launched its Managed Payments Network for institutional clients and secured Deutsche Bank as a USDC custody provider, signaling the mainstream banking system's embrace of stablecoin infrastructure. Fireblocks, now serving more than 95 banks globally, has integrated with the Canton Network for regulated settlement infrastructure, partnered with Thales for bank-grade hardware security, and is handling issuance and distribution for Qivalis, a consortium of twelve European banks building a euro-backed stablecoin.
The consortium model may prove most relevant for community banks. The CARI Network, led by former OCC Comptroller Gene Ludwig and backed by Key Bank, Huntington, First Horizon, M&T Bank, and Old National, is building a permissioned Layer-2 blockchain for tokenized deposits using ZK rollup technology. The pilot is scheduled for Q3 2026 with customer-facing launch in Q4. While the initial members are regional banks, the consortium model demonstrates an approach that state banking associations or correspondent banking networks could replicate for community bank participation, similar to what the Texas Bankers Association is already pursuing.
Regardless of which technology pathway a bank pursues, the strategic evaluation requires answers to a specific set of questions. What is the key use case we are building for — deposit defense, new fee income, competitive positioning, or all three? Do we want to issue our own stablecoin, accept a third-party stablecoin, or offer tokenized deposit products? What are the financial, operational, IT, and people risk factors? What are the implications for AML and sanctions screening? From a technology perspective, do we build, partner, or participate in a consortium? And based on the answers, what is our business risk appetite and what is the desired ROI on the investment?
These are not technology questions. They are strategy questions that happen to require technology answers. The institutions that treat the technology decision as a procurement exercise will miss the strategic opportunity entirely.
Interoperability is the other dimension that demands board-level attention. As multiple stablecoins, tokenized deposit platforms, and blockchain networks emerge, the ability to move value across systems without fragmentation will determine which platforms create lasting competitive advantage and which become dead ends. Community banks evaluating partnerships should be asking whether the infrastructure they adopt today will interoperate with the platforms their correspondents, counterparties, and customers are building on.
Core provider dependency is a real constraint but not an insurmountable one. The institutions that frame this as a core technology decision alone are limiting their options. The institutions that evaluate sidecar platforms, BaaS partnerships, direct custody relationships, and consortium participation alongside their core provider's roadmap will have the most strategic flexibility.
A bank cannot offer tokenized deposit products if its core platform cannot interface with blockchain settlement infrastructure. But a bank also cannot afford to wait for its core provider to deliver the capability if competitors are moving now. Community banks should be pressing their core provider on specific timelines, integration requirements, and pricing for digital asset capabilities. And they should be evaluating alternative pathways in parallel.
The institutions that wait for their provider to market the solution will be behind the institutions that demanded it. And in a market where deposits are going digital, being behind is a risk the balance sheet cannot absorb.
CCG Catalyst works with community and regional banks, credit unions, and fintech companies on digital asset strategy, payments infrastructure, and regulatory readiness. If your institution is evaluating its position on tokenized deposits and stablecoins, reach out to our team at www.ccgcatalyst.com.
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By: Paul Schaus | Founder & Managing Partner, CCG Catalyst Consulting
Disclaimer: The views expressed in this article represent the perspective of CCG Catalyst Consulting based on our direct experience advising financial institutions. This commentary is intended to stimulate industry discussion and does not constitute legal, accounting, or regulatory advice.
