The Fintech Times put questions to Petter Sandgren, CEO of Centiglobe, and Svante Hedin, CEO of Greenbridge Markets, about how the model works, where the risk sits and what it means for the capital PSPs tie up in pre-funding.

Sandgren described the flow as similar to a stablecoin payment. Money is collected in local currency, converted into tokens, moved between two digital wallets and converted back for payout through the local payment system. The difference lies in what the token is.

“A tokenised deposit is essentially a digital version of money held in a bank account,” he said. “The token itself does not have a value of its own, it represents the holder’s claim on the underlying bank deposit. This means it is treated as bank money rather than as a digital asset, which can make the legal and regulatory setup simpler across different countries.”

The token is bank-agnostic because, although the deposit sits at one bank, it can be used outside that bank’s own network, so two PSPs with no direct relationship with the issuing bank can still use it to settle. Because tokenised deposits are bank money, PSPs can also keep them on their balance sheets and offset payments against each other rather than repeatedly converting in and out of tokens.

Greenbridge sits at both ends of that process. “Without this service, each member would need to maintain their own bank account for the tokenisation and normally place funds in advance, even if they only need them later,” Sandgren said.

Source link