Banks favour tokenised deposits
Banks are showing more interest in tokenised deposits than in stablecoins because tokenised deposits map more closely to existing banking liabilities while still enabling faster, digital settlement. American Banker explains the shift toward tokenised deposits as a bank‑friendly path to digital money (americanbanker.com).
Banks spent years warning that stablecoins could pull deposits out of the banking system. Now many of the same banks are backing a different digital token that keeps the deposit inside the bank: the tokenized deposit. (americanbanker.com) A stablecoin is usually a digital claim backed by cash or Treasury bills set aside in reserve. A tokenized deposit is the bank deposit itself, wrapped in token form so it can move on blockchain-style rails without changing who owes the customer the money. (bis.org) That distinction is why banks like it. The liability stays on the bank’s balance sheet, the customer relationship stays with the bank, and the bank can plug the token into the same compliance, reporting, and settlement systems it already uses for ordinary deposits. (americanbanker.com) (eba.europa.eu) Banks also see a business problem in stablecoins. A December 17, 2025 Federal Reserve note said wider stablecoin use could shift funds away from bank deposits, which would change how banks fund loans and other credit. (federalreserve.gov) Tokenized deposits promise the speed people associate with crypto without asking banks to hand the payment layer to outside issuers. The Bank for International Settlements says tokenization lets claims be represented in digital form and used on programmable platforms with smart contracts, which means payments can be automated when preset conditions are met. (bis.org) Big banks are already building around that idea. J.P. Morgan said in 2025 that its Kinexys unit was piloting JPMD, a United States dollar deposit token on Base, for institutional clients that want near-instant, 24/7 settlement and near real-time liquidity. (jpmorgan.com) Regulators have also made the bank route easier to explore. On March 7, 2025, the Office of the Comptroller of the Currency said national banks could engage in certain crypto-asset, distributed-ledger, and stablecoin activities, and it rescinded a 2021 letter that had required extra supervisory non-objection. (occ.gov) European regulators are studying the same lane. A 2024 European Banking Authority report said tokenized deposits can support programmable payments and identified projects tied to commercial banks, card networks, and shared token networks rather than only crypto-native issuers. (eba.europa.eu) The fight is really over who gets to issue digital cash for the internet era. Stablecoins point to a world where money moves as a separate product alongside banks, while tokenized deposits point to a world where banks keep issuing the money and just swap the plumbing underneath it. (americanbanker.com) (bis.org) That is why tokenized deposits are getting the warmer reception inside banks. They offer the new part — round-the-clock, programmable, blockchain-based transfer — without forcing banks to give up the old part, which is the deposit franchise itself. (americanbanker.com)
