What is multi-rail finance? How blockchain technology and traditional banking are converging

More traditional financial (TradFi) assets like stocks and bonds are being tokenised, or represented as digital tokens on the blockchain. Blockchains are digital ledgers that record and verify transactions across decentralised networks. They can carry cryptocurrencies and stablecoins, which are cryptocurrencies pegged to a “real-world asset” like the US dollar to hold a stable value.

Alongside them is a growing segment of tokenised real-world assets. Their total value on blockchains reached US$30.9 billion (S$39.5 billion) in August 2026, nearly triple the US$10.4 billion a year earlier, according to blockchain data provider Allium. “Blockchain infrastructure is increasingly being explored for payments, settlement and tokenisation,” said Richard Teng, co-chief executive officer of cryptocurrency exchange Binance. 

Its near-instant, round-the-clock feature offers “practical advantages in how value is moved, settled and deployed”, he added. 

Binance said its global platform is authorised through its regulated entities in the Abu Dhabi Global Market (ADGM). AGDM is the international financial centre of the United Arab Emirates’ capital. 

Binance does not hold a licence to conduct regulated activities in Singapore.

A multi-rail future

Teng describes these developments as the finance industry’s move towards a multi-rail system.

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“A multi-rail system means traditional payment networks, stablecoins and blockchain infrastructure working together, without users needing to think about what sits underneath,” he explained.

Blockchain rails can act as payment rails – for the transfer of stablecoins, for example – but they carry more than payments, Teng said. The same infrastructure can support the issuance, transfer, custody and collateralisation of financial assets, which is what allows an asset to operate across multiple rails.

“The Franklin Templeton model shows (the multi-rail system) in practice – an asset can be issued on one rail, held in regulated custody and used as collateral on another,” Teng said.

The model made the needs on both sides tangible, he added. Traditional finance can benefit from the speed of the blockchain technology, while cryptocurrency can gain from TradFi’s operational discipline and risk management. 

Making that seamless requires interoperable custody and settlement, reliable convertibility and legal clarity across jurisdictions, he added.

Various jurisdictions have adopted different regulatory approaches to stablecoins and crypto assets, with varying scope, licensing requirements and implementation, he said.

“Ultimately, (blockchain) technology should make financial access more open, flexible and interoperable,” he said.

This was produced in partnership with the Monetary Authority of Singapore and the Global Finance & Technology Network.

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