Barclays enters the stablecoin market for the first time—why is traditional finance suddenly betting on tokenized cash?

UK’s major bank Barclays has made its first equity investment in a stablecoin-related company, officially taking a stake in American startup Ubyx. This is not an ordinary venture capital deal but a significant shift in the traditional financial system’s attitude toward stablecoins. Moving from a cautious observer to an active participant reflects that stablecoins are evolving from fringe tools for crypto trading into infrastructure that mainstream financial institutions are eager to deploy.

The “Fragmentation Dilemma” of Stablecoins and Ubyx’s Solution

Where is the core issue

The stablecoin market appears prosperous, but in reality, it faces a critical fragmentation problem. According to the latest news, the circulating market cap of USDT issued by Tether has approached $187 billion, but this is just the tip of the iceberg. There are multiple stablecoins such as USDC, TUSD, USDP, each pegged 1:1 to fiat currencies, yet none can be freely settled and exchanged like a truly unified currency.

From another perspective, it’s like there are 100 different “dollars” circulating globally, each claiming to be equivalent, but they can only be converted through exchanges and market makers. This inefficiency is unacceptable for institutional users.

Ubyx’s positioning and significance

Ubyx’s core positioning is as a stablecoin clearing and redemption platform. Simply put, it aims to enable stablecoins issued by different entities to be settled and exchanged as if they are the same currency, eliminating market fragmentation. This addresses a key bottleneck in the upgrade process of stablecoins from trading tools to settlement infrastructure.

Barclays’ investment indicates that this direction has gained recognition from traditional finance. Banks do not invest for hype; they invest in infrastructure that solves real problems and can improve efficiency.

Why is traditional finance betting on stablecoins now

Bank’s strategic logic

Barclays stated that this investment aligns with its overall strategy to explore “tokenized currencies” and stablecoin applications within a regulatory framework. It is not an isolated decision.

In fact, Barclays had already joined a consortium of 10 banks in October 2025 to jointly explore issuing digital currencies backed by reserves linked to G7 currencies. Investing in Ubyx now is a further deepening of this strategy. The banks’ logic is clear:

• Efficiency-driven: The efficiency advantages of stablecoins in cross-border payments, institutional settlements, and on-chain clearing have been validated. Once standardized as a settlement tool, traditional banks do not want to be excluded from the system.
• Competitive pressure: Crypto-native stablecoins have already formed a large market scale. Banks must either participate in defining future standards or passively accept market realities.
• Regulatory friendliness: The Bank of England and the Financial Conduct Authority (FCA) are developing more comprehensive stablecoin regulations, providing a compliant framework for bank participation.

( Diversified capital support

Ubyx has also received backing from both traditional financial and crypto-native capital. Besides Barclays, leading US CEXs and Galaxy Digital’s venture capital arm have previously participated in its funding rounds. This “dual-track” financing background indicates that, from both traditional finance and crypto perspectives, Ubyx’s problem-solving approach is seen as having core value.

Current state and prospects of the stablecoin market

) The impact of scale growth

Although mainly used in crypto trading venues, stablecoins are growing rapidly. USDT’s market cap has approached $187 billion, and this privately issued “dollar substitute” has shown explosive expansion after finding product-market fit.

This growth is not a bubble but a genuine reflection of market demand for liquidity, efficiency, and 24/7 settlement.

Balancing regulation and opportunity

The Bank of England has proposed setting holding limits for systemic stablecoins to prevent large-scale bank deposits flowing into private tokens under market pressure. While it appears to be a constraint, it actually signifies a refinement of the regulatory framework. With clear rules in place, banks can participate with greater confidence.

Summary

Barclays’ investment in Ubyx reflects the core contradictions and solutions in the stablecoin cycle: banks seek to improve settlement efficiency through stablecoins and tokenized cash, regulators emphasize financial stability and responsibility boundaries, and infrastructure projects like Ubyx aim to build broadly accepted bridges between the two.

The integration of traditional finance and crypto is no longer a choice but an inevitable requirement. The future of stablecoins lies not in trading pairs within the crypto space but in becoming standard tools for cross-border payments and institutional settlements. Barclays’ move marks an acceleration in this evolution.