When the GENIUS Act was passed in July 2025, it seemed like a starting gun for banks and credit unions. Dozens of financial institutions had explored digital assets in the prior years, but many hesitated to get involved, unsure whether such activities were permissible.
Passage of the legislation — in full, Guiding and Establishing National Innovation for U.S. Stablecoins Act — has started the implementing regulatory process, and the challenge has shifted from compliance to infrastructure.
Key point. Stablecoins, tokenization and blockchain-based transactions in general pose the largest infrastructure platform shift for banking since the advent of the internet. These systems will accelerate an already prominent trend toward cloud-native “side core” processing systems.
Need to Know:
Traditional banking cores were built as contained, predictable systems. Transactions move through established networks and reconcile according to defined schedules. Controls, reporting and oversight were designed around that model.
Stablecoin operations, by contrast, do not stop at 5 p.m. on Friday.
A single transfer requires interacting with an external blockchain, confirming settlement, updating internal ledgers, and maintaining compliance and reporting standards at any hour.
Reconciling a 24/7 external network with systems built for business-day processing creates friction across finance, risk, operations and IT.
The Side Core Era Begins
For most banks and credit unions, replacing the legacy core is neither practical nor necessary.
The solution: The more realistic path is one or more side cores. This is the pathway of many core challengers, as well as the pathway that legacy core providers are choosing for their own new products.
The necessity to interact with digital assets and stablecoins will rapidly accelerate this trend. Though many insist that every financial institution needs a stablecoin strategy, perhaps a more appropriate framing is that every financial institution needs a side core strategy, inclusive of stablecoins and other digital assets.
Why side cores are necessary. A digital asset side core serves as an interoperable layer between the bank’s existing systems and new services needed to interact with stablecoins, tokens and blockchains. The ledgering, orchestration, controls, compliance, reporting and reconciliation familiar today on the traditional banking side require a translation layer for the new asset types.
The side core approach allows institutions to modernize at the edges without a disruptive internal rebuild. This strategy creates the capacity not only for stablecoin transfers, but also for additional digital asset use cases to follow, from tokenized deposits to digital asset-based lending and rewards.
How to Begin Moving to Side Cores
Banks and credit unions often begin this journey by speaking directly with digital asset infrastructure providers like custodians or stablecoin issuers.
They quickly confront the reality that there is far too much scope to handle, necessitating a comprehensive side-core solution to aggregate these services. (Sometime the technology is referred to as “sidecare cores.”)
By way of example, this can include a myriad of items — custody, “gas” costs, core integration, accounting, stablecoin issuer integration, digital asset ledgering, compliance, exchange integration, blockchain network infrastructure, liquidity management, orchestration and permissioning. (“Gas” refers to how much it costs someone to transact on a blockchain.)
Key challenge: Side cores underscore a simple reality: Most institutions are not structured to develop this capability themselves.
Only a small number of highly technical banks have the engineering teams and modern cores required to integrate directly with blockchains and service providers like custodians, exchanges and issuers.
For everyone else, bolting stablecoin functionality onto legacy systems introduces operational risk and complexity that those systems were never designed to manage.
‘But Our Customers Aren’t Asking about Stablecoins’
A common objection I hear from bank leaders is that customers are not asking for stablecoin services from their banks. While that may be true at present, actual customer behavior often tells a different story from what banks and credit unions may not be hearing.
A recent KlariVis study of community banks found that 90% have customers actively transacting with Coinbase, with a $2.77-to-$1 ratio of outflows to inflows. For every dollar returned from this platform, nearly three left and did not come back. These transactions suggest that many customers are already engaging with digital assets, simply outside the traditional banking system.
Banks have an opportunity to reverse this trend. A recent survey found that 77% of crypto-active individuals would open a stablecoin wallet within their bank or fintech app if it were offered. Many customers would prefer to access stablecoins through their existing, trusted financial institution rather than through standalone crypto platforms.
Keep your eyes on the landscape. Firms such as Stripe, Shopify, Uber, JPMorgan Chase, PayPal, SoFi, State Street, Visa and Mastercard have all launched stablecoin and other digital asset initiatives to stay at the forefront of this industry shift.
Stablecoins already represented $33 trillion in annual transaction volume in 2025, up 72% from the previous year, and will ramp up even further as industry adoption grows. (Perspective: Note that the transaction figure comes from a report by McKinsey and Artemis Analytics, which acknowledged that much of that flow isn’t “real world” — yet — instead reflecting usage for settlements and more.)
For banks and credit unions, the implication is clear: Get ready. As consumer payments and financial markets gradually move toward 24/7 settlement on stablecoin rails, institutions that build the necessary infrastructure will be ready to participate.
Those that wait risk deposit outflows to competitors.
Steps Your Institution Can Take
As 2026 unfolds, infrastructure readiness should be a priority for bank and credit union leaders. It’s becoming clear every bank needs a side-core strategy that includes digital assets.
How to get rolling. One initiative that I have seen lead to success is forming a cross-functional working group across finance, risk, compliance, IT and operations.
Humorously called DAWGs (Digital Asset Working Group), the group is then able to more clearly evaluate what is required to support 24/7 digital assets safely and reliably. That effort should include clear executive sponsorship and board visibility, as digital asset infrastructure decisions affect risk posture, liquidity management, and long-term competitive positioning.
From there, institutions should identify a logical initial use case, such as developing stablecoin send-and-receive capabilities for corporate treasury. For most institutions, that will require implementing a side core through a specialized digital asset infrastructure firm, in coordination with their core banking vendor and digital banking frontend provider.
Above all, the priority now is putting the right infrastructure in place to support future digital asset services. Institutions that move from discussion to controlled implementation in 2026 will be best-positioned for the next phase.
Originally published on March 30th, 2026 in The Financial Brand, Banking Technology Section.