The Neutral-Rail Thesis | Stellae Liquiditas Research

First drafted 2 January 2026 · Hong Kong. Researched and published 3 July 2026.

A research note of Stellae Liquiditas LLC · Division 03 · Digital Assets

This note began in Hong Kong. Its author spent the final three weeks of December 2025 there — attending conference sessions and, in the days after, digesting local financial media and on-the-ground resources through January 2, 2026. The observation that formed there, that the world’s cross-border settlement rails were beginning to split along geopolitical lines, was set down as an unsourced draft on January 2. We returned to it in July 2026 to complete the analysis and anchor every factual claim to primary institutional and peer-reviewed sources. The dateline reflects both moments: the observation, and its documentation.

Cross-border settlement is fragmenting into competing sovereign systems. We hold — as a thesis, not a settled fact — that this fragmentation raises the structural value of politically neutral, publicly accessible settlement rails. This note lays out the evidence for the fragmentation, states our thesis plainly, and names what would prove it wrong.

I. The problem everyone is solving

Correspondent banking is slow and expensive. The G20 named cross-border payment inefficiency an explicit reform priority, and nearly every major settlement experiment of the past five years is an answer to it. In the 2022 mBridge pilot, real-value transactions settled in seconds rather than the three-to-five business days typical of correspondent banking, at costs reduced by up to half. The technical case for moving off legacy rails is no longer in dispute. The open question is who owns the replacement.

This is unfolding against a monetary backdrop that scholars have begun to name directly. Recent peer-reviewed analysis frames the present moment as a looming “Bretton Woods 2.0” — an international monetary system pushed toward fragmentation by the twin forces of digitalization and geopolitical multipolarity. Cross-border settlement is where that fragmentation becomes concrete.

II. Two blocs, one question

The replacement is arriving as two competing systems built by two competing blocs.

The first is Project mBridge. It began as a collaboration between the BIS Innovation Hub, the Bank of Thailand, the Central Bank of the United Arab Emirates, the Digital Currency Institute of the People’s Bank of China, and the Hong Kong Monetary Authority, reaching minimum viable product stage in mid-2024 with the Saudi Central Bank joining as a full participant. Under the partner central banks’ leadership, mBridge has processed more than four thousand cross-border transactions with a cumulative value of approximately $55.49 billion — a roughly 2,500-fold increase in transaction value since 2022 — with the digital yuan accounting for approximately 95.3 percent of total settlement volume. The Bank for International Settlements exited the project in October 2024.

The second is Project Agorá. Launched by the BIS with the Institute of International Finance as private-sector convener, it brings together seven central banks — the Banque de France for the Eurosystem, the Bank of Japan, the Bank of Korea, the Bank of Mexico, the Swiss National Bank, the Bank of England, and the Federal Reserve Bank of New York. More than forty private financial firms confirmed participation, including JPMorgan Chase, Mastercard, BNP Paribas, Standard Chartered, and Euroclear, in an effort to integrate tokenised commercial bank deposits with tokenised central bank money on a shared programmable ledger. In 2026 the project demonstrated multi-currency settlement using tokenised central bank reserves and commercial bank deposits and announced it would advance to real-value testing, with the Bank of Canada joining.

Two systems. No overlapping members. One is anchored in Beijing; the other in the G7. The same technical problem, solved twice, along a geopolitical fault line.

III. The concentration problem

A multilateral platform on which one currency represents roughly 95 percent of settlement volume is, in practical terms, a single-currency rail with partners attached rather than a balanced multilateral network. That is not a criticism of its engineering — it is an observation about its center of gravity.

The deeper issue is conditionality. A settlement rail denominated in sovereign digital currencies inherits the political properties of those currencies. Membership implies alignment. This is not hypothetical framing on our part: the BIS itself moved to distance mBridge from the perception that it could let sanctioned states bypass the international financial system, its general manager stating that “mBridge is not the BRICS bridge.” When the operator of a system must publicly deny a geopolitical use, the geopolitical dimension is already priced in. A counterparty outside the sponsoring bloc, transacting on that bloc’s rail, accepts a form of political exposure that has nothing to do with the transaction itself.

Closed rails serve their members well. What they cannot easily do is serve a counterparty who belongs to neither bloc — or who needs to move value between blocs that have deliberately built systems that do not interoperate.

IV. The thesis

Here is our thesis, stated as a thesis.

When settlement infrastructure fragments into sovereign and bloc-aligned systems, the value that must still cross those boundaries needs infrastructure that belongs to none of them. A politically neutral, publicly accessible ledger — one not issued, owned, or governed by any single state — is structurally positioned to serve exactly the flows that closed rails are least able to carry: cross-bloc, non-aligned, and neutral by default.

The logic is straightforward. If a Chinese-led rail and a G7-led rail will not connect to each other by design, then the party who needs to settle across that gap requires a third option that neither bloc controls. Public permissionless ledgers with a neutral bridge asset are one such option. They are not sovereign instruments. They carry no membership requirement and impose no alignment. Their neutrality is not a marketing posture — it is a property of not being owned by anyone.

We do not claim this thesis is proven. We claim it is the most defensible reading of where fragmentation leads, and that a treasury positioned on neutral public rails is positioned for the flows a bifurcated system cannot otherwise route.

V. The neutral rail is already carrying value

The thesis is not purely forward-looking. A public, permissionless settlement rail is already moving cross-border value at scale — in the form of dollar stablecoins.

Stablecoins settle on public blockchains, require no membership in any monetary bloc, and are reachable by any party with a wallet. According to the International Monetary Fund, cross-border stablecoin flows surpassed those of unbacked crypto assets in early 2022 and the gap has widened since, with the two largest dollar stablecoins representing roughly 90 percent of the market. The Bank for International Settlements, in its 2025 Annual Economic Report, acknowledges that stablecoins can offer lower cost and faster settlement than incumbent rails — particularly cross-border — and that they provide access to foreign currency, overwhelmingly the US dollar, for users facing capital controls or limited dollar access.

Two honest qualifications. First, a large share of stablecoin activity is still crypto trading and automated rebalancing rather than end-user cross-border payments, though the payments share is rising. Second — the distinction that matters for our thesis — a dollar stablecoin is a neutral rail carrying a sovereign unit. It escapes bloc membership at the infrastructure level, but its unit of account is still the dollar. The BIS notes the corollary directly: widespread stablecoin use can extend dollar reach into other jurisdictions and pressure their monetary sovereignty — which is precisely the pressure that drives sovereigns to build closed CBDC rails like mBridge in the first place.

This clarifies the thesis rather than complicating it. There are two expressions of the neutral public rail: a dollar stablecoin (neutral rail, sovereign unit) and a neutral bridge asset (neutral rail, neutral unit). Both escape bloc membership; they differ in what they carry. Stellae Liquiditas holds regulated dollar stablecoins as reserve and working capital for the first property — and holds a position in a neutral bridge asset for the second.

VI. Why the XRP Ledger fits the thesis

If dollar stablecoins are the first expression of the neutral rail, the XRP Ledger is built for the second.

The XRP Ledger is a public, permissionless network on which XRP functions as a neutral bridge asset between currencies, settling in seconds through a consensus protocol rather than proof-of-work mining. It is not issued by a central bank, not governed by a state, and not confined to a membership bloc. Any institution in any jurisdiction can build on it without permission and without accepting an alignment condition.

That is precisely the profile our thesis calls for. Where mBridge asks a participant to settle in someone else’s sovereign currency and Agorá routes value through the incumbent banking structure of the G7, a neutral public ledger asks for neither allegiance. It is infrastructure for the counterparty who fits in no one’s bloc — which, in a fragmenting system, is a growing share of the world.

This is the structural reasoning behind the XRP position on the Stellae Liquiditas balance sheet. Not a price forecast. A bet on neutrality as an asset when neutrality becomes scarce.

VII. What would prove us wrong

An honest thesis names its own failure conditions.

This thesis weakens if the blocs achieve broad interoperability among themselves — if mBridge, Agorá, and their successors build bridges to each other, the demand for a neutral third rail shrinks. It weakens if neutral public ledgers fail in practice on the dimensions that matter operationally: sufficient liquidity in the bridge asset, institutional-grade compliance tooling, and real adoption by the entities that move cross-border value. And it weakens if sovereign systems simply absorb the non-aligned world by extending membership faster than fragmentation creates gaps — mBridge’s rapid growth shows sovereigns can scale closed rails quickly when they choose to.

We track all three conditions. Until they turn, we read the evidence as pointing toward neutral rails, and we position accordingly.

Sources

Bank for International Settlements — Project mBridge reaches minimum viable product stage and invites further international participation, press release, 5 June 2024 (participants; MVP; Saudi Central Bank as full participant).
Bank for International Settlements — Project mBridge project page, BIS Innovation Hub (mBridge Ledger; MVP status; conclusion of BIS involvement, 2024).
Bank for International Settlements — mBridge pilot report, 2022 (real-value pilot; settlement in seconds versus correspondent banking; cost reduction).
Atlantic Council GeoEconomics Center — Central Bank Digital Currency Tracker and associated analysis, “What to watch as China prepares its digital yuan for prime time,” January 2026 (cumulative volume ≈ $55.49B; ≈ 95.3% e-CNY share; > 4,000 transactions; ≈ 2,500-fold increase since 2022). Note: mBridge publishes no official volume figures; the Atlantic Council tracker is the authoritative institutional dataset.
Bank for International Settlements — BIS, central banks and the IIF invite private financial institutions to join Project Agorá, press release, 14 May 2024 (seven participating central banks; IIF as private-sector convener).
Bank for International Settlements — Project Agorá shows how tokenisation can improve wholesale cross-border payments; work will advance to real-value testing, press release, 27 May 2026 (multi-currency settlement demonstrated; real-value testing; Bank of Canada joins).
Bank for International Settlements — Project Agorá: a shared programmable platform for wholesale cross-border payments, report (othp110), 2026; and BIS Annual Economic Report 2023, Chapter III (unified-ledger concept).
Peer-reviewed: Reshaping the state–finance–tech nexus through central bank digital currencies: the case of the mBridge project, 2025 (BIS Innovation Hub withdrawal, October 2024; geoeconomic framing).
Khidasheli, M. & Chikhladze, N. (2026). Fragmentation and Digitalization: Outlines of a Looming Bretton Woods 2.0. Journal of Innovative Economics and Management, 13(1), 17–30. DOI 10.46361/2449-2604.13.1.2026.17-30.
International Monetary Fund, Monetary and Capital Markets Department (2025). Understanding Stablecoins (cross-border stablecoin flows surpassed unbacked crypto assets in early 2022; USDT and USDC ≈ 90% of market; rising cross-border payments use).
Bank for International Settlements (2025). The next-generation monetary and financial system, Annual Economic Report 2025, Chapter III, June (stablecoin cost and speed in cross-border payments; dollar access and monetary-sovereignty implications).
XRP Ledger documentation (xrpl.org) — consensus protocol; XRP as a bridge asset; settlement characteristics; permissionless access.

Addendum I — USD1 in Pakistan: a documented case

Added 31 July 2026. This addendum records a factual development relevant to the subject of this note — a dollar stablecoin explored for cross-border settlement by a sovereign state. It is presented as a documented case only; the analysis in Sections I–VII is not extended here.

On 14 January 2026, the Pakistan Virtual Assets Regulatory Authority (PVARA) announced that a memorandum of understanding had been signed with SC Financial Technologies — an entity PVARA described as affiliated with World Liberty Financial — to explore the use of the USD1 stablecoin within Pakistan’s regulated digital-payments framework, with a stated focus on cross-border payments and remittances. PVARA characterized the memorandum as a framework for dialogue and technical understanding around emerging digital payment architectures. The agreement was described as one of the first publicly announced agreements between World Liberty Financial’s ecosystem and a sovereign state. USD1 is a US-dollar-pegged stablecoin issued by World Liberty Financial; according to the issuer’s reserve disclosures, it is custodied by BitGo Trust and backed by cash and short-duration US Treasury instruments.

Pakistani officials stated that the memorandum does not authorize adoption; it establishes a framework to study the technology under regulatory oversight. If pursued, USD1 would operate alongside Pakistan’s planned central bank digital currency rather than replace it.

The regulatory position was clarified on 26 April 2026, when PVARA issued Advisory PVARA/ADV/001/2026. The advisory states that under the Virtual Assets Act, 2026, the issuance, transfer, custody, exchange, or arrangement of virtual assets and stablecoins for users in Pakistan falls within PVARA’s regulatory ambit; that any agreement or announced pilot that results in or directly enables such services requires prior authorization from PVARA; and that public announcements made without prior engagement may give rise to regulatory, reputational, and FATF-compliance risks, including the possibility that the proposed activity may not lawfully proceed. The advisory directs parties to engage through PVARA’s regulatory sandbox, no-action-relief, or no-objection-certificate processes.

As of the date of this addendum, the arrangement remains at the memorandum stage. No operational deployment of USD1 in Pakistan’s payment system has been announced by PVARA.

Sources for this addendum

Pakistan Virtual Assets Regulatory Authority — public statement on the memorandum of understanding with SC Financial Technologies, 14 January 2026 (first-party institutional announcement).
World Liberty Financial — disclosure of its agreement with SC Financial Technologies and the Government of Pakistan, January 2026; USD1 reserve and custody disclosures, 2025 (first-party).
Pakistan Virtual Assets Regulatory Authority — Advisory on Virtual Asset-Related Announcements and Activities, Reference PVARA/ADV/001/2026, 26 April 2026 (first-party regulatory advisory).
Virtual Assets Act, 2026 (Pakistan) — statute establishing PVARA’s licensing and supervisory authority.

Stellae Liquiditas LLC · Principal-only digital asset treasury · Stellae Group Division 03. This note reflects the firm’s own analysis and treasury conviction and is not investment advice. Figures current as of the publication date above and drawn from the cited institutional and peer-reviewed sources.