Episode description

In this episode of the Applied Blockchain Podcast, Adi Ben-Ari speaks with Bernhard Schweizer, Head of the SAP Digital Currency Hub, about how large enterprises are beginning to adopt stablecoins for B2B payments - and what that means for the future of financial operations.

Bernhard shares insights from over 30 years at SAP, explaining how his team is bridging traditional ERP systems with blockchain-based payment rails. He outlines how stablecoins offer cost, speed, and transparency advantages for cross-border transactions, and how enterprise treasuries may eventually shift toward tokenized financial instruments and real-time, on-chain portfolio management.

They discuss:

• Enterprise use cases for stablecoins in ERP payment runs
• Why cross-border B2B payments are ripe for disruption
• How SAP integrates blockchain payments via custodians and wallets
• Accounting, reconciliation & IFRS treatment of stablecoins
• Stablecoin vs commercial bank token infrastructure
• The role of regulation: MiCA in Europe & U.S. frameworks
• How treasuries could one day manage tokenized T-bills, MMFs & RWA tokens
• What’s needed to overcome the “chicken-and-egg” problem of adoption

Resources Mentioned

• MiCA (Markets in Crypto-Assets Regulation): europa.eu
• PayPal’s PYUSD stablecoin: paypal.com
• The Innovator’s Dilemma by Clayton Christensen
• Zero to One by Peter Thiel
• Crossing the Chasm by Geoffrey A. Moore
• Thinking, Fast and Slow by Daniel Kahneman

Transcript

Adi (00:01)

Bernhard Schweizer, welcome to the Applied Blockchain Podcast.

Bernhard Schweizer (00:02)

Great pleasure being here.

Adi (00:17)

So Bernhard, tell us a little bit about yourself—your role, and I guess what you’re doing at the moment. Just for the listeners to learn a bit more about you.

Bernhard Schweizer (00:29)

Right, yeah. I’m Bernhard. I work at SAP in Germany, and I lead a team called the SAP Digital Currency Hub.

What we do is enable customers—enterprises—to make and receive payments in digital currencies. We’re very focused on stablecoin payments.

It’s interesting how we came to the conclusion that this is a relevant topic for enterprises, because not many use stablecoins—or blockchain-based payment systems—today.

Actually, it started about three years ago, when a customer in Australia reached out and asked whether SAP could support them in taking Ether as a means of payment from their clients. It was a gaming company, and they said: “We want to get paid in Ether, and we also want to grant prizes in Ether.”

They were creating a virtual horse race. You could purchase a horse, race the horse, and then win a prize. They said, “It must be quite simple—why don’t you just add another currency code to the ERP system and you’re done?”

And we said, “Stop—it’s not so easy.”

You need to account for it appropriately. First, all those digital currencies don’t just have up to six digits. They have much, much more—Ether has 18 digits. A classical ERP system typically supports six, and basically treats the currency as a currency; it doesn’t validate or evaluate beyond that.

So we validated this with other customers: “Is payment in cryptocurrencies interesting for you?”

Most customers immediately said, “Stay away. It’s too risky. I don’t like the fluctuation.”

Adi (02:06)

That’s not hugely surprising.

Bernhard Schweizer (02:09)

Not really. But what they did like was the fact that you get instant payments, rather cheap cross-border payments, and you don’t need to mind banking hours—24/7, near-instant payments at low fees.

That resonated well.

So we said: “There is a breed of token, a crypto asset, a digital asset—and that’s a stablecoin.” A well-done fiat-pegged stablecoin—like USDC, EuroC and the like—is ideally suited as a means of B2B payment.

And that basically brought us to develop a solution that enables exactly that: instant, cheap, always-on payments at global scale. That’s what we’re bringing to market soon and currently testing with a good handful of customers.

Adi (03:08)

OK, amazing. Very interesting.

I’m personally very interested in this as well, because we’ve done a lot of work with enterprises over the years.

You might not be familiar with this, but when we first started back in 2016, we went through the Barclays Techstars program with an invoicing solution called TallyStix.

It was invoicing and invoice financing. We actually did a proof of concept with SAP—because we worked with Barclays, who were a big customer. And yeah, we set something up in the SAP cloud. This was back in 2016—we didn’t even have stablecoin payments then.

That was a while ago, and of course it was very early, so I think it just stayed where it was.

But it’s really interesting to see that this has—

Bernhard Schweizer (03:53)

Yeah, why go back?

Adi (04:07)

—it’s been revived, in a form that’s updated for the current stablecoin environment.

Let me give you my rough understanding of how this works—and feel free to fill in or correct me.

My understanding is that most large enterprises use SAP for ERP—or one of the competitors we won’t name.

Within that, ERP has a financial module where the CFO or treasury team manages payments.

At the end of each month—or week—there’s a payment run, and a file is produced by the ERP system…

Bernhard Schweizer (04:56)

Yes.

Adi (05:04)

…as a result of all the entries for people that need to be paid. And that usually goes to a bank, gets uploaded, and the payments are executed. Right? That’s my rough idea of how enterprise payments work today.

Bernhard Schweizer (05:07)

Yes, and I think that’s a very good rough idea.

To go a little deeper: it’s not just employee payments—supplier payments are the bulk. Typically, those payment runs happen daily, or three times a week—quite frequently.

Now, here’s where stablecoins come in, in a non-disruptive fashion—and that’s important. It doesn’t change how you do business. It just changes how you move money.

As an accountant, you receive an invoice, book it into your ERP system—same as always.

What you can do now is change one attribute of the invoice, called the payment method.

You instruct the system: “Don’t pay this invoice via bank transfer. Use a stablecoin instead.”

And you can set this at a business partner level—so that a supplier is always paid in stablecoins—or just for select invoices.

From the accounting perspective, the process stays the same.

And yes, there’s the payment run, which captures all invoices that share the same payment method.

What we’re building is the bridge between the ERP world and the blockchain world.

We receive the payment file and ensure that it’s executed as a blockchain transaction.

We also monitor the blockchain for incoming payments—capture the transaction—and feed the data back to ERP in the same format a bank would: a traditional account statement. That’s something any finance system can handle.

And under IFRS, stablecoins are considered a cash equivalent—so they’re accounted for 1:1.

‍

Adi (07:33)

Okay, that’s interesting. What happens—what’s the magic behind the scenes?

So I described roughly what happens with a regular bank payment: a file gets uploaded with the destination account and amount.

What happens with a stablecoin payment?

Bernhard Schweizer (07:34)

Let’s dive very deep into that part of the process.

From the ERP system, we know who needs to be paid, how much, and what the business purpose is—usually an invoice number, for reconciliation.

We take those data points, and we have the wallet address stored at the business partner level—that’s the equivalent of an IBAN or bank account number.

Then, we create a blockchain transaction with the amount, the token to be settled (like USDC or USDT), and the network to settle on.

We send that transaction to the blockchain for validation.

That’s one stream. But here’s the thing: most customers don’t want to manage wallets themselves—they want to rely on a custodian.

And we all know the big custodians out there.

So rather than creating the blockchain transaction directly from a customer-managed wallet, we instruct a withdrawal via the custodian. The custodian then executes the transaction—either directly on-chain or, if both parties use the same custodian, they can do an internal “book-to-book” transaction using omnibus wallets.

Adi (09:00)

Mm-hmm.

Bernhard Schweizer (09:22)

Exactly. That’s the flow.

Adi (09:31)

Are you able to share which platforms you’re integrated with, or which stablecoins you’re supporting? Are those public yet?

Bernhard Schweizer (09:43)

Absolutely.

Today we work with USDC and PYUSD.

USDC is part of our standard delivery.

But technically, we can support any ERC-20 token.

If a customer comes and says, “I want to use ERC-20 token ABC,” we can just add it to the platform in a matter of minutes. So any ERC-20 compatible stablecoin can be supported.

We can also support any network the custodian supports.

If you’re running self-custody using our own stack, the networks of choice are Ethereum and Polygon.

If you’re using a custodian, then it depends on which networks they support.

Adi (10:29)

Okay, amazing.

So Bernhard, I feel like that gives a very clear picture of the “what”—how it’s set up and how it works.

Then I guess the next question is: the “why?”

Bernhard Schweizer (10:33)

Right. And that’s very much a business question:

Why, as a business, should I care about stablecoins and all this new “crazy” tech stuff coming out of the crypto world?

The first case is cross-border payments. That’s where most enterprises—startups too—are looking.

Cross-border payments today are quite expensive. Typically, you’re paying at least $20 per transaction. That’s a lot.

In the blockchain world—on a cheap network like Polygon—you’re paying cents.

Now, if you’re making a $100 million payment, $20 is noise.

But if you’re a smaller enterprise, or shifting to a subscription model, you’re issuing smaller invoices—$500, $1,000. Paying $20 just to move money—that is a lot.

So cost becomes very relevant.

Adi (12:13)

Mm-hmm.

Bernhard Schweizer (12:13)

Second is speed. Customers told us cross-border payments can take 2–7 days.

In that time, your money is stuck—no interest earned.

Why does that happen? Because the sending bank doesn’t usually have a direct relationship with the receiving bank.

So the money hops across a network of corresponding banks—each one doing KYC, AML, and other due diligence. That takes time and costs money.

With blockchain, it’s simple:

Sender has a wallet, recipient has a wallet.

Transaction gets validated—it takes minutes, maybe seconds.

There are no intermediaries.

Then there’s transparency.

In those 7 days with a bank transfer—you don’t know where the money is. The sender says it’s sent. You say you haven’t received it.

Unless you’re a huge organization with access to SWIFT, you can’t trace the messages the banks are sending.

If you’re a mid-sized enterprise, you’re flying blind.

NGOs also came to us with this issue—they distribute aid money and want traceability. They want to know: who received the money, when, and how. Blockchain gives you that transparency.

So it’s cost, speed, transparency…

Adi (13:59)

Yep.

Bernhard Schweizer (14:04)

…and availability.

Let’s say you’re closing a merger or acquisition on a Saturday—a big transaction. You may not care about saving $20. But your counterparty needs to see the money come in. That’s barely possible in traditional banking.

Blockchain is always on—24/7, 365 days a year.

You can move money at any time.

That’s the base layer. And from here, we can talk about more sophisticated use cases.

Adi (14:48)

Yeah, okay. Makes a lot of sense.

For us, as a small business, at one point we were receiving half of our revenue in USDC and stablecoins from U.S. companies.

And before they even emailed to say they’d paid—we could already see the balance.

Bernhard Schweizer (15:10)

Yep—it’s the beauty of it.

Now, here comes the challenge.

You’ve got stablecoins sitting in your wallet, and you’ve got your ERP system.

If you get one payment, fine—you can manually reconcile it.

But large enterprises receive thousands of payments a day. They can’t manually check wallet balances and figure out who paid what.

You just see a sending wallet address—you don’t want to match emails to addresses manually.

Adi (15:11)

Right…

Bernhard Schweizer (15:39)

Exactly. So we automate that process.

We monitor the wallet, know which receivables are open, match the incoming payments, and feed that information back into the ERP system.

We basically tell it: “This payment has been made.” It gets booked automatically.

Adi (15:57)

Bernhard, how do you solve the chicken-and-egg problem here? Which is that you need both sides to want to do this and support it, right?

Bernhard Schweizer (16:07)

It’s a difficult one, right? I mean, you need to build up a network. And of course, first and foremost, it’s not something we as a tech provider can solve alone.

It’s up to our customers to push their suppliers toward accepting stablecoins.

That’s one route—and probably the simpler one. But it doesn’t scale easily.

So what we’re doing is also engaging with financial services providers.

Is there an opportunity where, by working with a traditional institution, you can accept stablecoins—but still see everything in fiat?

Meaning, you don’t have to manage wallets or anything technical. Your customer sends stablecoins, and you receive fiat.

So there’s still a financial service provider in between.

Adi (17:16)

I concur. I just think the roles change.

It’s like the Blockbuster–Netflix comparison.

It’s not that we don’t need distribution anymore—the media still has to be distributed—it’s just that the technology and platforms have changed.

So the roles change.

Custody, regulatory enforcement—all these things still matter.

Regulation might evolve to enable the technology better, but I don’t think it goes away.

The roles just adapt.

Bernhard Schweizer (18:20)

Yes, absolutely. It’s still continuing to evolve.

The role of financial services—banks in particular—will be amended.

They’ll offer more services, more options to customers.

We’re also seeing regulation play a positive role.

Some people don’t like regulation, but I think it’s key in the enterprise world.

All the customers we speak to say:

“If there are real regulatory guardrails, we feel comfortable doing business with a stablecoin or on the blockchain.”

In Europe, we have MiCA—the Markets in Crypto-Assets regulation.

In general, I think that’s a very good thing. It gives us guardrails and trust. It signals that this is serious and real.

We’re also seeing movement in the U.S. with the new administration—also very positive.

So hopefully, both Europe and the U.S. will soon have solid stablecoin regulations, so businesses can operate with them between these regions.

That’s a good thing.

Adi (19:22)

Yeah.

When you have conversations with large companies, what’s that experience like?

I imagine you put this idea out there, and there’s some curiosity—but I assume treasury teams aren’t always familiar with it.

They might think:

“I don’t need this,” or

“This isn’t something I understand or want to engage with.”

So what do those conversations look like?

And how far do you think we are from the day when, say, a large enterprise just puts a blockchain address on their invoice and expects payment?

Bernhard Schweizer (20:33)

Probably sooner than later, actually.

Let me give you a public example—PayPal.

I think we can agree that’s a large enterprise.

PayPal is using our tech stack to process payments in PYUSD—their own U.S. dollar-denominated stablecoin.

We’ve publicly announced transactions where PayPal pays service providers through our stack.

So large enterprises are starting.

It’s not yet mainstream, but it’s happening.

You also asked: what do treasury departments think?

Honestly, it requires a lot of education.

They need to first understand what a stablecoin is—and more broadly, the various forms of digital currencies:

• Central Bank Digital Currencies (CBDCs)
  
  
• Commercial Bank Money Tokens (CBMTs)
  
  
• Stablecoins
  
  

They need to understand which instrument serves which purpose.

Our ambition at SAP is to support all of them:

• Traditional bank payments (still 99%+ of volume)
  
  
• CBDCs
  
  
• CBMTs
  
  
• Stablecoins
  
  

From a technical perspective, we distinguish between payments that run through the banking network (addressed via bank account numbers) versus wallet-based payments (blockchain).

Some banks building CBMTs hide everything behind APIs. From the user’s point of view, it still looks like a regular bank account.

Others offer wallet-based services that speak directly to blockchain.

We support both.

We have:

• Multi-bank connectivity (for the bank-account-addressed world)
  
  
• The Digital Currency Hub (for the wallet-addressed world)
  
  

So we cover the full spectrum.

And coming back to what I said earlier about non-disruptive processes—the core business document is always the invoice.

You just choose the payment method:

• Traditional banking, or
  
  
• Digital currency (wallet-based)
  
  

Then we route the transaction accordingly.

Adi (23:00)

Yeah. Bernhard, one of the things I come across in conversations is that there’s a small number of companies whose treasuries are now interested in crypto assets or digital assets.

There are also more and more companies putting together real-world asset solutions.

Some people I speak to describe a scenario where a treasury holds some of these real-world asset tokens—maybe tokenized treasury bills or other financial instruments.

Because they’re tokenized, they can move in and out of them easily.

It gives them more speed and flexibility from a blockchain technology point of view.

And then there are also potential efficiencies through DeFi-type mechanisms.

So there’s one angle, which is what you’ve described—payments processing.

But there’s another angle: treasuries possibly wanting to hold funds in tokenized form, to manage them more efficiently.

That feels a bit further out, but is it something you’re hearing about? Or is it still a niche discussion?

Bernhard Schweizer (24:32)

It’s something we hear about, yes.

We’re watching that space very closely.

You’re right—it’s probably a bit further out.

But let’s sketch a 10- to 15-year perspective:

Will enterprises run entirely on blockchain?

That’s a provocative idea.

Why would I stay deeply integrated into traditional systems, if all my financial assets—tokenized bonds, treasury bills, money market funds—are already on-chain?

If I’m using stablecoins not just to move money, but also to drive investment—then I’m essentially operating in a real-time financial world.

That’s fascinating.

We’re already speaking to enterprises building those platforms—licensed providers in this new breed of real-world asset infrastructure.

It’s still early, but the building blocks are coming together.

Now, under European law—under MiCA—stablecoins are not interest-bearing.

So from a treasurer’s point of view, why would I just hold a stablecoin? It doesn’t make much sense.

But now, if I can hold real-world assets on-chain—if I can buy and sell them easily, cheaply, and settle instantly—then it gets exciting.

Let’s say I receive stablecoins.

I buy a money market fund and hold it overnight.

Then, I need to pay a supplier.

I liquidate the fund and pay with the stablecoin.

And all of that can be done automatically.

So now imagine defining an investment profile:

“I want to hold X% in money market funds, Y% in higher-yield instruments.”

You could even integrate AI to help rebalance the portfolio.

You’re separating store-of-value (e.g. tokenized financial assets) from means-of-exchange (e.g. stablecoins)—two classic properties of money—and you’re making them seamlessly interchangeable on-chain.

That’s a very compelling vision.

We think it’s still 10–15 years away—but we hope real-world adoption comes sooner.

Adi (27:07)

I’ll second that. Let’s get a few invoices paid first, and then…

Bernhard Schweizer (27:16)

Yep, you need to start somewhere.

It all comes back to education—and a shift in mindset.

Treasurers are typically conservative and risk-averse.

You have to show them the benefits of the technology, and also demonstrate that it’s not more risky than what they’re already doing.

I find it interesting—at conferences, you’ll see people from the stablecoin camp and the commercial bank money token (CBMT) camp arguing over which is safer.

One side says, “Banks have existed forever. We just tokenize our deposits. Nothing changes. We’re the good guys.”

The other side says, “We hedge our reserves. We hold 20–30% in bank deposits, the rest in treasury bills. We have a diversified portfolio.”

So which is safer? It’s hard to say.

Big banks do fail. Lehman Brothers collapsed 15 years ago.

It’s not obvious which is the “best” form of money going forward.

Treasurers need to gain confidence in these new forms—whether it’s CBMTs, stablecoins, or tokenized money market funds.

We’re starting to see big banks issue them—and that builds trust.

People need trust in the infrastructure and the providers.

Then, we need use cases—big companies with big brand names stepping up and saying, “Yes, this works.”

That’s what will drive the ecosystem forward—for the benefit of everyone involved.

Adi (29:14)

Yeah, very good. Ultimately, people will vote with their feet.

Treasurers will vote with their feet.

They’re the ones using this stuff—so they’ll look at the products out there and choose what they’re most comfortable with.

That’s how this evolves.

But hey, I didn’t ask you—how did you get into this space in the first place?

Was your background within SAP? Or were you working in blockchain or digital assets previously?

Bernhard Schweizer (29:44)

Actually, I’m a long-time SAP guy.

I’ve been with SAP for about 30 years. I started in the mid-90s as a programmer.

I moved through different areas—was in research for a while—and more recently, before this project, I was working in the market.

That’s when we saw demand for fast, cheap, cross-border payments.

We decided to enter the space, and I helped build the team of experts to make it happen.

Adi (30:03)

Yeah, very good. It must be like opening up a whole new world—diving into this ecosystem and trying to unpack it in a relatively short time.

Bernhard Schweizer (30:28)

It’s a fascinating world, indeed.

Adi (30:30)

Before we go, I usually ask guests:

Do you have any resources—a book you’ve read, a podcast you follow, anything you’d recommend to our listeners?

Bernhard Schweizer (30:49)

Yes, I personally love anything to do with innovation.

The Innovator’s Dilemma by Clayton Christensen is one of my favorites.

Everyone should read it.

Also Zero to One by Peter Thiel—he talks about how success often comes from dominating a small market, rather than being a nobody in a big market.

Another classic: Crossing the Chasm.

I also enjoy books on psychology. One author described how we have two sides—a rational side and an emotional side. The emotional side usually makes decisions faster, but often without deep thinking.

So people are biased in how they make decisions—and that’s something I find fascinating.

It’s all about understanding innovation and behavior.

These are the kinds of books I enjoy.

They always inspire me to think differently—even in a large enterprise.

Adi (31:54)

So something like Daniel Kahneman—Thinking, Fast and Slow?

Bernhard Schweizer (31:56)

Exactly.

Adi (32:00)

Very good.

Okay, Bernhard—thank you very much. That was super interesting.

It’s great to see that this is now available.

We’ll definitely be spreading the word—and we’ll encourage the companies we talk to to explore it.

And like many of our guests, I hope we can do another episode in one or two years and see how far things have progressed.

Bernhard Schweizer (32:41)

Absolutely.

We’ve made some bold projections—that the world is moving toward digital assets, real-world assets, and stablecoins.

Let’s see where we are in two years.

Hopefully, we’ll see enterprises adopting this at scale.

Maybe we’ll even see more interesting use cases emerge.

We didn’t even touch on programmability—that’s further down the road, but super exciting.

It’s been a real pleasure. Thanks for having me.

Adi (33:09)

Yeah, very good. Thank you very much, Bernhard.

Bernhard Schweizer (33:12)

Thanks.