Tassat CEO: Banks Focus on the Wrong Stablecoin Problem

Conversations about stablecoins have a way of turning into conversations about technology. Which chain, which standard, whose rail. When PYMNTS CEO Karen Webster sat down with Tassat CEO Glen Sussman for the “Monday Conversation” series, she put a plainer question on the table. “How many rails do we need?”

The real answer is probably fewer than are currently under construction, and Sussman didn’t argue the point. What he offered instead was this. The question, fair as it is, aims at the wrong target. Counting rails is a technology exercise. The thing actually being contested is older, duller and a good deal more consequential.

It’s the deposit.

The Stablecoin Whiplash

Sussman has watched the mood inside banks swing hard enough to give a person whiplash.

“For two or three years, you literally couldn’t mention the word blockchain inside of a bank without getting thwacked in the head,” he said. “And now all of a sudden, everybody’s getting thwacked in the head for not having a digital-asset strategy.”

That reversal, from career risk to career requirement in roughly 24 months, he said explains a great deal about the current landscape, including its least flattering features. Banks, payments networks, core providers and crypto-native firms are all standing up tokenized-deposit systems and stablecoin infrastructure at a velocity that has begun to look less like conviction and more like insurance. Nobody wants to be the institution that has to explain to a board why it did nothing.

Sussman is direct about what that produces. Outside the largest global institutions, he said, he sees very little genuine commitment to any single model. What he sees is “a lot of optionality preservation.” Pilots joined, expertise accumulated, bets hedged, nothing irreversible.

He’s careful not to criticize. He’s lived the alternative. Tassat ran blockchain-based settlement platforms for Signature Bank and Customers Bank, which means Sussman knows firsthand what it takes to hold a real-time environment open around the clock while keeping it synchronized with core systems designed in a different century.

“People underestimate the work that it takes,” he said.

Which brings the strategy question back into focus. A tokenized deposit network with no users is not a strategy. Neither is stablecoin connectivity that reproduces, at considerable expense, a service a larger competitor already offers. Sussman’s counsel to banks is to experiment in a “light touch and opportunistic way” and to stay ruthless about what sits on the other side of the investment.

“Banks need to be focused on building their businesses, not just building pool infrastructure,” he said.

The Arithmetic Nobody Does Onstage

Here’s where the conversation stopped being about architecture.

Stablecoin reserves are, at today’s scale, a rounding error against the U.S. deposit base. Sussman said that’s the only reason the industry can still debate stablecoins as a payments-innovation story. Change the denominator and the story changes with it.

“When you’re talking about $5 trillion, $10 trillion of stablecoin scale, that giant sucking sound is going to be all the deposits leaving all of the regional and community banks,” Sussman said.

Sussman said the mechanics of that outcome aren’t complicated, and that’s exactly what makes them dangerous. Every dollar of stablecoin in circulation is backed by something. That something is cash and high-quality liquid assets, and it has to be held somewhere.

Today, “somewhere” means a short list of very large institutions with the custody infrastructure, the balance-sheet capacity and the operational tolerance for always-on settlement at scale.

So the money doesn’t disappear. It relocates. A deposit that used to sit at a $4 billion bank in Ohio, funding loans in that bank’s own market, becomes a reserve balance parked at an institution that has never heard of Ohio. The community bank doesn’t lose a payments product. It loses a deposit.

And that’s the part of the stablecoin conversation regional bankers haven’t yet fully digested. And it reframes what “having a digital-asset strategy” is supposed to accomplish. The point was never to own a rail. The point is to avoid being disintermediated out of their own deposit base one by one.

Giving Regional Banks a Seat at the Digital Assets Table

Which is the clearest way to understand what Tassat is now building.

Under Sussman, who’s been CEO for just about a year, the company has organized around three fronts. Digital-asset capital markets, tokenized bank products and stablecoin infrastructure. Lynq, its real-time settlement and collateral network backed by tokenized Treasuries, sits on the capital markets side. Tassat is also supplying technology to an interbank tokenized deposit effort.

The piece aimed at the reginal bank deposit problem is Project NENYA, introduced in July 2026 and slated to launch in early 2027. NENYA is designed to help stablecoin issuers distribute reserves across cash deposits and tokenized high-quality liquid assets. And, on the other side of that transaction, to give banks a way to compete for those balances.

Sussman said that Tassat isn’t proposing to move anyone’s money faster. It’s proposing to open a market that’s currently closed by default. Right now a stablecoin issuer’s reserves land where the plumbing already reaches, which means they land with the biggest players. NENYA’s premise is that reserve deposits should be something a midsize bank can pitch for on price and terms, the way it competes for any other commercial deposit relationship, rather than something it watches flow past on its way to a custody desk in Manhattan.

Not a rail, but an auction, more or less. And it’s a materially different bet from the one most of the market is making.

Sussman thinks the distinction is about to matter a great deal, because he expects the underlying infrastructure to commoditize. When issuing a token and moving a token become table stakes, and he believes they will, the technical achievement stops being an advantage. What is left is liquidity, distribution and applications.

“What everybody’s focused on today is mind share and market share,” he said. “And that’s ultimately where the game is won.”

The Assumption Everyone Is Making

There is a load-bearing assumption underneath all of this, and Webster named it before the conversation closed.

Every projection of trillions in stablecoin float, every warning about deposit flight, every business case built on top of both, depends on ordinary commercial customers deciding that stablecoins are worth switching to. Not interesting. Not innovative. Better.

“It goes back to the use cases for stablecoins,” Webster said. “Someone has to think that they’re good enough or better than what they’re using today in order to drive the demand.”

Sussman doesn’t dispute it. He acknowledges that the applications that would justify the buildout largely haven’t been built yet. “Stablecoins are going to need to thrive on programmatic use cases and applications, many of which are yet to be developed,” he said.

Which they both agreed leaves the industry in an unusual and slightly absurd position. An enormous amount of capital deployed against a demand curve nobody has seen. The rails are laid. The passengers are hypothetical.

Sussman’s argument is that this is precisely why banks below the megabank tier should spend their money on customers rather than on plumbing. And why the institution that ends up mattering may not be the one that built the best network, but the one that made sure its clients had a reason to be on it.

In other words, the rails will get built either way. The deposits are the thing worth fighting over.