Miami Beach, FL — A growing group of Wall Street and crypto executives say the financial system is heading toward a breaking point, as markets shift from human-paced processes to machine-driven activity that runs around the clock.

“We’re moving to a world where transactions happen at a speed no human can track,” Sandy Kaul, head of digital assets and innovation at Franklin Templeton, said during a panel on the future of capital markets at Consensus in Miami on Tuesday. At the same time, “almost every process in capital markets today was built for humans, and none of them will stand up to what’s coming,” she added.

The tension between those two ideas — faster, automated markets and legacy systems designed for manual oversight — sat at the center of the conversation.

For decades, financial markets have relied on layered processes to handle trades. Systems batch transactions, reconcile records and settle trades hours or even days later. That structure dates back to a time when physical stock certificates moved across Wall Street by hand.

Now, blockchain infrastructure is starting to remove those constraints. Panelists pointed to tokenization — the process of turning assets like stocks or money market funds into digital tokens — as a key shift. These tokens can move instantly, settle in seconds and operate continuously.

“We are unwinding a system that’s been in place for 50 years and going back to settling one transaction at a time,” Kaul said, describing how real-time settlement could replace today’s batch-based model.

That shift has practical implications. In a tokenized system, an investor’s cash could remain fully invested until the exact moment it is spent. “Every penny of my earnings is fully invested from the moment I earn it to the moment that I spend it,” Christine Moy, partner at Apollo, said, outlining a future where idle cash largely disappears.

The same logic applies to large corporations. Instead of holding cash across multiple accounts worldwide, companies could pool funds into yield-generating assets and convert them only when payments are due.

Still, major hurdles remain. While blockchain networks can already process transactions quickly, some panelists argued that the industry lacks the rules and standards needed for institutions to operate at scale.

“We’ve solved the transaction problem. What’s missing is a standard for governance,” said Tom Zschach, former chief innovation officer at Swift, pointing to the need for clear rules around ownership, compliance and permissions.

That gap matters for large financial firms, where reliability often outweighs speed. “If there’s a chance it might not work, it’s a non-starter. What institutions need is certainty,” he said.

At the same time, competitive pressure is rising. As newer platforms offer faster and more flexible financial services, traditional firms risk losing clients if they fail to adapt.

Taken together, the discussion suggests the next phase of market evolution will not just be about faster trades. It will center on rebuilding the underlying systems so they can support continuous, automated flows of capital—without breaking the trust that global finance depends on.

Miami, FL — Crypto doesn’t need regulation – something that charting the price of bitcoin over successive U.S. governments clearly shows, according to the provocative co-founder of BitMEX and CIO of Maelstrom, Arthur Hayes.

Hayes’ thesis is simple: fiat liquidity – precisely, the printing of more units of fiat money – is the only thing that affects bitcoin’s value proposition.

“I believe that if you want to talk about what is the price of Bitcoin and what’s the fair value, or what’s the future price, all that matters is how many units of fiat are there today,” Hayes told the audience at Consensus Miami 2026. “How many units of fiat will there be in the future, and what’s the pace of this fiat creation?”

While there’s a lot of talk about tradfi and regulators and crypto coming together and having this “bastard child,” the majority of people who attend conferences like Consensus want only to see the number go up, Hayes said. But they forget the price of Bitcoin has gone from zero to however many trillions of dollars that it’s worth today, he added, hammering his thesis home:

”The more money that is printed in the U.S. and around the world, the more value that bitcoin will have in fiat currencies,” said Hayes. “And it’s this liquidity part of the equation that really drives the price of bitcoin, and not anything to do with politics.”

Few executives in crypto maintain a social presence as lively, chaotic and strangely insightful as Hayes’. Behind the lapel-grabbing theatrics lies a track record that traders pay. For instance, Hayes was early to the rise of several AI-adjacent tokens, a sector that dominated speculative flows throughout 2024 and 2025. He also championed Zcash (ZEC), which rallied more than 450% over the past year.

Looking back over the last few U.S. administrations, key factors can be picked out that greatly bolstered the value of bitcoin, Hayes said. These included bailing out banks during the banking crisis and printing a lot more money, which sent bitcoin “off to the races.”

More recently, events like COVID, stimulus checks, Biden’s New Green Deal, and the Russian invasion of Ukraine have driven up the value of bearer assets like bitcoin and gold.

“This is the value that bitcoin provides outside of the regulatory apparatus,” Hayes said. “It’s precisely the reason that it does not adhere to the regulatory regime that some of you wish to put it under with bills like the clarity Act and other and other things.”

MIAMI BEACH, Fla. — CoinDesk’s flagship Consensus conference kicks off today at the Miami Beach Convention Center, bringing thousands of people together for the annual big-tent event to discuss the digital assets sector.

Day one of the conference will see local officials and startup executives lay out the state of the crypto world. Arthur Hayes, Lily Liu, Jesse Pollak, Anatoly Yakovenko, Mike Cagney, Brad Garlinghouse and more will present keynotes or take place in firesides to open the conference, weighing in on everything from the current macroeconomic environment to the future of AI tooling to the growth of decentralized finance. Keep an eye on this liveblog for updates throughout the day.

On the policy front, CoinDesk will see discussions about the U.S. Department of Justice’s fight against developers of mixers and hear from Congressional staffers about how exactly crypto-specific legislation is being written. Congressman Steven Horsford will discuss his effort to reform how the U.S. handles taxes around crypto transactions, while CFTC Chairman Michael Selig talks about his agency’s growing efforts to wrangle crypto and prediction markets.

Agentic payments, privacy tools and more familiar crypto tooling will — naturally — also see discussions throughout the day.

Tomorrow will also see CoinDesk host its Capital Markets Summit, bringing together traditional finance veterans with companies trying to bring these products onchain. A key theme at Consensus Hong Kong this past February was the growth of tokenization as a way for these long-established firms to build faster, more efficient tooling for their existing products. Is that trend real and will it continue? Come find out.

Tomorrow — and throughout the week — we’ll also have meetups for folks interested in different topics, like prediction markets or the midterm election, to connect with each other. Definitely take advantage of those; the Consensus Lobby has been one of the most-appreciated aspects of this event for the last decade, but now you can hang in a dedicated space for it instead of hoping for an empty corner in an actual lobby.

Space and Time (SXT), a level-1 data blockchain that secures onchain finance projects, has launched a virtual vault platform that it says is purpose-built for institutional lending.

The Microsoft-backed blockchain said on Tuesday that its new virtual vaults can be configured by institutional lenders and borrowers to their specific agreement, with cryptographically verified, continuously updated visibility into borrower collateral across the centralized exchanges and decentralized finance (DeFi) protocols where it actually sits.

Real-time verification of collateral has long vexed the institutional lending sector, with generic solvency metrics falling short of practical needs.

“We built Space and Time so both institutions and onchain protocols could verify the data they act on, and Virtual Vaults are the clearest expression of that yet. Institutional lenders need to see exactly what collateral backs a loan, exactly when they need to see it,” said Nate Holiday, co-founder of Space and Time and CEO of MakeInfinite Labs, in a statement shared with Cointelegraph.

Screenshot of SXT Chain Explained. Source: YouTube

Each vault is configured to the specific terms of its lending agreement, that is, which venues to monitor, which assets qualify as eligible collateral and what thresholds trigger alerts, according to the statement.

Related: Fireblocks launches tool for institutions to earn yield on stablecoins

Virtual vaults extend the platform into onchain credit, bringing verifiable controls and reporting to the systems institutional lenders and borrowers actually need to operate at scale, the company said.

Microsoft made VC investment, then integrated SXT with Fabric intelligent data platform

M12, Microsoft’s venture capital arm, participated in Space and Time’s Series A funding round and led a 2022 strategic funding round, according to Token Terminal data.

SXT’s most recent round, in August 2024, raised $20 million from investors including Lightspeed Faction and Arrington Capital, brought the total to $50 million. A company spokesperson declined to comment on current financing plans.

Space and Time was integrated with Microsoft Fabric a year ago and was recently designated a Microsoft co-selling cloud solution. The software giant touts Fabric as an end-to-end “intelligent data platform” that its deployed across its cloud offerings. 

Since then, the Space and Time Foundation has partnered with Southeast Asia’s Indomobil to onboard 50,000 students to the ecosystem. That program uses Space and Time to store proof of course completion and students pay for courses in SXT.

Space and Time (SXT) market cap over last 12 months. Source: Token Terminal

The blockchain’s native token, SXT, is deployed on multiple chains, including Ethereum and Base. At time of publication, CoinMarketCap data showed there were 368,350 token holders. SXT had a market cap of $21.92 million.

Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

Key Takeaways

• Shares of PayPal declined approximately 9% during premarket hours following first-quarter earnings results
• CEO Enrique Lores announced plans to achieve a minimum of $1.5 billion in gross run-rate cost reductions within 2-3 years
• Cost savings will be realized through artificial intelligence implementation, process automation, and organizational restructuring
• First-quarter adjusted earnings per share of $1.34 exceeded analyst expectations of $1.27; revenue of $8.35 billion also surpassed projections
• Second-quarter outlook disappointed investors, with adjusted earnings per share projected to decline approximately 9%

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PayPal shares were changing hands at $45.77 during premarket trading on Tuesday, representing a decline of roughly 9.2%, following the release of first-quarter financial results and the announcement of an extensive cost-reduction initiative under new executive leadership.

PayPal Holdings, Inc., PYPL

CEO Enrique Lores, who assumed his position in March following the departure of Alex Chriss, acknowledged that PayPal has insufficiently invested in its technology infrastructure and is lagging behind competitors. His solution: streamline operations, accelerate AI implementation, and concentrate the company’s strategic focus.

“PayPal needs to focus,” Lores stated. “We need to recommit to the fundamentals.”

Lores brings experience from HP, where he established a reputation for operational efficiency and strategic pivots toward artificial intelligence and subscription-based models. He’s now implementing comparable strategies at PayPal.

The initiative targets a minimum of $1.5 billion in gross run-rate cost reductions over the coming two to three years. PayPal intends to reinvest these savings into growth initiatives and to mitigate operational challenges.

The company has not disclosed specific headcount reduction figures, but the transformation will include eliminating “duplication and layers” throughout the organizational structure. Enhanced deployment of AI and automation across business operations represents the other primary strategy.

During this year and next, the organization will restructure teams and implement new operational systems and procedures. This represents a comprehensive transformation rather than incremental adjustments.

First Quarter Performance Exceeds Expectations, But Forward Guidance Disappoints

Revenue for the first quarter reached $8.35 billion, increasing from $7.79 billion in the comparable period last year, and exceeding analyst consensus estimates of $8.05 billion.

Adjusted earnings per share reached $1.34, surpassing the consensus forecast of $1.27. However, GAAP net income decreased to $1.11 billion, or $1.21 per share, compared to $1.29 billion, or $1.29 per share, during the same quarter of the previous year.

Transaction margin dollars—a critical profitability indicator—increased 3% to $3.8 billion. Total payment volume expanded 11% to $464 billion.

The positive earnings and revenue performance proved insufficient to counterbalance subsequent guidance concerns.

Second Quarter Projections Pressured Share Price

For the second quarter, PayPal projected adjusted earnings per share to decline by approximately 9%, representing a high single-digit percentage decrease. Transaction margin dollars are anticipated to decrease roughly 3%.

For the complete fiscal year, the company maintained its forecast for adjusted earnings per share growth ranging from a low single-digit decline to marginally positive.

This conservative outlook prompted a negative market response, signaling that investors had anticipated stronger projections.

Organizational Transformation Into Three Operating Segments

Last week, PayPal announced a reorganization into three distinct business units: Checkout Solutions & PayPal, Consumer Financial Services & Venmo, and Payment Services & Crypto.

Lores identified checkout capabilities as his primary strategic focus. He also recognizes expansion opportunities in buy now, pay later services as consumers increasingly demand flexible payment alternatives.

The board of directors appointed Lores specifically due to dissatisfaction with “the pace of change” under previous leadership. PayPal’s checkout division had experienced decelerating growth following the post-pandemic period.

PayPal’s restructuring announcement coincided with Coinbase revealing approximately 14% workforce reductions, and followed Block’s February decision to implement similar cuts. All three companies cited artificial intelligence capabilities as a primary driver for the workforce adjustments.

Transaction margin dollars grew 3% to $3.8 billion during the first quarter, while total payment volume reached $464 billion, representing an 11% year-over-year increase.

Coinbase said Tuesday it had chosen Centrifuge as its preferred tokenization infrastructure and made a strategic investment in the firm.

Under the deal, Centrifuge is positioned to serve as the default issuance layer for tokenized assets across Coinbase’s ecosystem, including products on Base. The first wave of institutional assets is expected to launch on Base in the coming weeks, the firms said.

Coinbase’s push into tokenized capital markets spans ETFs, credit and structured products. The Centrifuge deal gives Coinbase an infrastructure partner for outside asset managers that want to issue products onchain, though it doesn’t appear to be exclusive.

Coinbase Asset Management said last week it would issue its CUSHY stablecoin credit fund through Superstate’s FundOS platform, and in March tapped Apex Group to tokenize a share class of its Bitcoin Yield Fund on Base. Coinbase Ventures was also already an investor in Centrifuge, having backed a 2022 strategic round.

Centrifuge powers onchain strategies for Apollo, Janus Henderson and S&P Dow Jones Indices. It crossed $1 billion in total value locked in mid-2025 and now has $1.66 billion, according to DeFiLlama data.

The deal comes as tokenized real-world assets have grown to roughly $27 billion onchain. Tokenized treasuries and other fixed income products account for about $16 billion of that.

The RWA sector is currently led by Securitize and Ondo Finance, along with leading stablecoin issuer Tether and Circle via their tokenized gold product and money market fund, respectively.

“What matters now isn’t getting assets onchain, it’s getting the right assets onchain in the right way,” Centrifuge CEO Bhaji Illuminati said.

Coinbase CEO Brian Armstrong had announced earlier Tuesday that the exchange was laying off 14% of its employees, saying AI tooling had made them redundant.

European policymakers are weighing how far tokenization can extend Europe’s payments fabric, signaling that the euro area could move beyond traditional rails to a tokenized settlement layer in the coming years. A senior Italian central bank official outlined tokenized SEPA as an important area for reflection, while the Eurosystem advances two parallel tracks aimed at linking distributed ledger technology (DLT) with central bank money and existing settlement rails.

In a speech delivered at the Digital Assets and Monetary Policy Transmission workshop in Rome, Bank of Italy Deputy Governor Chiara Scotti described a tokenized extension of SEPA as a pathway with clear potential due to Europe’s scale, shared standards and interoperability. She underscored that Europe’s current payments framework already offers a foundation that could support broader tokenization of settlement, with careful attention to governance, risk controls and public money as an anchor. The speech was published in early May 2026, and Scotti framed the topic as one that deserves ongoing policy consideration.

Key takeaways

• Europe is actively exploring a tokenized extension of SEPA as part of its broader digital money agenda, with emphasis on interoperability and scale.
• The Eurosystem is preparing a pilot called Pontes to connect market DLT platforms with TARGET Services, enabling settlement in central bank money, with completion targeted for the third quarter of 2026.
• ECB’s Appia project represents a longer-term roadmap for Europe’s tokenized financial ecosystem, aiming for a 2028 conclusion and addressing how tokenized deposits, stablecoins and central bank money can coexist.
• New ECB analyses warn that widespread stablecoin adoption could lead to retail deposit outflows, potentially altering banks’ funding profiles and raising liquidity concerns.
• Policy makers are signaling that tokenized deposits and stablecoins will require tokenized central bank money as a public settlement anchor to scale Europe’s tokenized finance system.

Two tracks shaping Europe’s tokenized future

The first track centers on practical settlement experiments that could pave the way for broader digitization of money. The Pontes project, described by Eurosystem officials as a distributed ledger settlement initiative, is designed to bridge market DLT platforms with the central banking settlement layer (TARGET Services) and finalize payments in central bank money. The aim is to test how a multi-DLT ecosystem could operate with a common settlement anchor, addressing questions of interoperability, security and operational risk. Officials expect a pilot completion in the third quarter of 2026, signaling a concrete milestone in Europe’s exploration of tokenized settlement rails.

A separate, longer-term effort is Appia, the European Central Bank’s roadmap for tokenized finance that envisions a more comprehensive framework for tokenized deposits, stablecoins and central bank money. Appia is not a single implementation but a strategic program that seeks to define how tokenized financial assets will interact with existing eurozone monetary infrastructure. The roadmap, with milestones through 2028, reflects a deliberate approach to balancing innovation with financial stability and monetary sovereignty.

The ECB has also underscored the importance of safeguarding monetary sovereignty in the face of rapid tokenization. A 2026 ECB statement notes concerns about non-euro stablecoins, citing the potential for serious consequences if euro-denominated settlement assets are displaced by foreign stablecoins. The central bank has repeatedly emphasized that any broad shift toward digital assets must be anchored, supervised and harmonized with trusted public money.

These themes sit alongside ongoing policy work and research. In March 2026, the ECB published papers highlighting risks associated with deploying stablecoins at scale. One working paper emphasized a “deposit-substitution mechanism,” where funds migrate from retail bank deposits to digital assets, a development that could intensify funding volatility for banks. A later focus paper reiterated concerns that stablecoin adoption could impact the stability and resilience of the traditional banking model if not accompanied by robust settlement rails and risk controls.

Stability concerns and policy context

The ECB’s public-facing analysis aligns with a broader European hesitation about stability and governance in a tokenized money regime. While tokenization offers potential efficiency gains and cross-border interoperability, policymakers warn that widespread use of stablecoins and other digital assets could complicate bank funding structures and monetary policy implementation if settlement assets or payment rails become fragmented or if retail deposits migrate rapidly into private digital money. The discussion continues to blend technical experimentation with macroeconomic prudence, a balance policymakers describe as essential for Europe’s monetary sovereignty.

Readers should note that European policymakers have not dismissed innovation; instead, they are pursuing a staged approach. The Pontes pilot seeks to demonstrate how market participants can operate across multiple DLT environments while using central bank settlement rails. Appia, by contrast, is a forward-looking framework aimed at ensuring tokenized assets, deposits and currencies can scale without compromising financial stability. Together, they signal a strategy of incremental adoption, paired with guardrails and cross-border standards that can help fuel adoption while preserving trust in euro-denominated money.

In related coverage, Cointelegraph highlighted that UBS is already engaging in a Swiss franc stablecoin sandbox with five banks, illustrating how large financial institutions are actively testing tokenized solutions within controlled settings. The European debate, however, remains focused on ensuring that tokenized money strengthens rather than undermines monetary sovereignty and financial stability across the euro area.

The March 2026 statements from Piero Cipollone, a member of the ECB’s Executive Board, reinforced this view, noting that tokenized deposits and stablecoins should be anchored by tokenized central bank money to enable a scalable European tokenized finance system. This framing aligns with the broader policy objective of maintaining strong public settlement rails as the private sector experiments with new forms of digital money.

In sum, Europe stands at a crossroads where tokenization could reshape payments, settlement and liquidity management, while policymakers seek to preserve monetary sovereignty and financial stability. The Pontes pilot and Appia roadmap are not mere experiments; they are signaling a measured path toward a digitized euro that integrates public money, tokenized assets and cross-border interoperability.

For market participants, the implications are clear: investors, users and builders should monitor the Pontes pilot’s outcomes, the Appia timeline and any policy updates on tokenized money. The balance between innovation and resilience will shape how quickly euro-denominated tokenized finance can scale, and how central banks coordinate with private sector platforms to ensure secure, efficient settlement in the years ahead.

As the Eurosystem continues to publish milestones and the ECB advances its strategic roadmap, observers should watch for concrete technical specifications, governance frameworks and cross-border alignment that will determine how tokenized money interacts with traditional banking products, stablecoins and cross-border payments. The coming quarters are likely to reveal whether Europe can usher in a tokenized settlement regime that preserves monetary sovereignty while enabling broader financial innovation.

Readers should stay tuned for further updates on Pontes progress, Appia milestones and any policy clarifications from the Bank of Italy and the ECB as Europe tests the boundaries of tokenized monetary infrastructure.