The challenges in digital payments include deciding which forms of digital money belong in the banking system, which belong alongside it, and how to connect these parts without creating new operational or regulatory blind spots.
During a “What’s Next in Payments” interview with David Trecker, vice president and head of digital assets strategy at FIS, the executive described an ecosystem in which multiple forms of digital money will coexist, each meeting different business needs.
“You have to cover the coast because a lot of the value of digital assets lies in the interoperability between the different types,” Trecker said. “How much you focus on one versus the other depends primarily on two things: which regions you focus on and which customer segments you focus on.”
While central bank digital currencies are barely gaining momentum in the United States, Trecker said banks operating in Europe cannot ignore initiatives like the digital euro. Financial institutions are therefore faced with a planning challenge that is less about selecting one technology and more about preparing for several.
The banks are also faced with another balancing act. Stablecoins have established legitimate payment and settlement use cases, particularly for transferring funds and storing U.S. dollars outside the United States. At the same time, banks remain focused on protecting deposits, which continue to form the basis of their financing model.
“Stablecoins can do things that commercial bank money can’t,” Trecker said. “Banks are now faced with a choice.”
They can either adopt stablecoins to deliver these outcomes for their customers, or they can find a viable alternative that can still deliver these things but works with their business model, he told PYMNTS.
This thinking underlies the Keystone Network, a bank-owned initiative based on tokenized deposits while recognizing that community and regional institutions require a different roadmap than the nation’s largest financial institutions. Trecker argued that these banks need practical business opportunities as well as blockchain infrastructure.
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Network design may be more important than technology
Much of today’s digital asset discussion revolves around cross-border payments, wholesale settlement, and multinational treasury operations. Trecker pointed out that the focus misses where many banks can generate value sooner.
Large global institutions already have natural applications for digital assets as they manage liquidity across different jurisdictions and time zones. Continuous processing and programmable treasury operations solve existing operational problems.
Regional and community banks operate under different conditions.
Rather than starting with multinational treasury management, Trecker pointed to smart deposits, programmable commercial banking services, bank-internal liquidity management and tokenized real-world assets as examples of how digital assets can deliver measurable benefits without the need for a massive external network. These projects allow institutions to gain operational experience before moving on to broader interoperability across the industry.
He described this progression as a transition from “single-player games” to hub-and-spoke models before broader network participation. Interbank settlement, correspondent banking and foreign exchange become more practical as banks build trusting relationships between smaller groups of participants who share common goals.
Trecker also said banks should keep a close eye on customer behavior rather than waiting for perfect return-on-investment models before acting. He compared today’s environment to the early years of online banking, when customer expectations were changing before many institutions could provide traditional financial justifications for digital investments.
“Today’s banking leaders have all seen some version of this movie,” Trecker said. “Customers wanted it, and those who didn’t have it moved.”
This lesson is particularly important for regional institutions that are accustomed to following larger competitors. Trecker questioned whether digital assets represent another cycle that banks can safely wait out, or whether customer demand is forcing some institutions to take the lead rather than follow.
Trecker noted that banks need clear accountability, consistent Know Your Customer and Bank Secrecy Act controls, defined liability frameworks and full transaction transparency before connecting to external networks.
His broader advice for the industry focused on collaboration. Banks, especially municipal and regional institutions, should view each other as natural partners rather than approaching digital assets solely through competitive position. Building larger banking networks based on common standards, he says, provides a stronger long-term foundation than fragmented initiatives that pursue isolated use cases.
Watch the full interview with David Trecker to learn more about:
- Why banks should recognize different forms of digital money as complementary rather than competing technologies.
- How customer behavior can become a stronger signal of acceptance than traditional ROI calculations.
- Why community banks and regional institutions could shape digital asset adoption through shared networks focused on the needs of domestic banks.
https://www.pymnts.com/blockchain/2026/fis-links-digital-money-to-smarter-bank-networks/
