Tokenized deposits: big banks race stablecoins in 2026

JPMorgan Chase, Citigroup and Bank of America are preparing a shared tokenized deposit network for the first half of 2027, a defensive move aimed at copying stablecoins’ useful plumbing before crypto firms can claim both the payments rail and the deposit balance.

Under the reported plan, The Clearing House would link traditional payment systems with digital-asset infrastructure while customer money stays inside regulated ledgers, according to the Wall Street Journal report on the tokenized deposit system. That is the strategic turn. Large lenders are not walking away from blockchain rails. They are trying to make sure the blockchain version of cash still counts, legally and economically, as a deposit.

Crypto companies see a different story. To stablecoin issuers and exchange operators, the consortium rail looks like pre-emption: build a permissioned version of the product, then use the Clarity Act fight to curb rewards on the open one. CNN’s reporting on the bank-crypto lobbying fight made that rift more visible. Payment speed is the public argument. Funding cost is the sharper one.

The Clearing House has avoided pitching the network as a speculative crypto product. Its nearer cousin is a treasury rail, built for corporate money movement that wants instant settlement without requiring a finance chief to hold USDT or USDC on a public chain. The Block quoted David Watson, president and chief executive of The Clearing House, on the scale of the shift:

“This is a big move for the banks,”

David Watson, president and chief executive of The Clearing House

Short sentence, large implication. If tokenized dollars become part of corporate payments, the largest US banks want those dollars to remain their liabilities.

The funding fight

Stablecoins are large enough for that defensive posture to make sense. The market is roughly $315bn, with Tether and Circle tokens accounting for about 90 per cent of supply, according to The Block’s coverage of UK stablecoin regulation. Against US deposits, that is still small. In payments, however, direction can matter before scale does.

A product that settles around the clock, travels across crypto venues and can be paired with rewards can double as idle operating cash. JPMorgan analysts have focused on whether the Clarity Act leaves room for passive stablecoin yield, a question they said may have only a narrow passage window this year in the Senate, where 60 votes remain the hurdle, according to The Block’s analysis of the crypto bill.

Jamie Dimon has cast the issue in bank-safety terms. During the Clarity Act fight, the JPMorgan chief executive warned that crypto firms could “effectively pay interest on deposits, stablecoins or something like that, without the protection that they should have,” according to The Block’s report on Sen. Cynthia Lummis’s response.

“effectively pay interest on deposits, stablecoins or something like that, without the protection that they should have”

Jamie Dimon, JPMorgan Chase chief executive

Lummis pushed back, called Dimon’s remarks distasteful and said he had not read the bill. The clash matters because both sides are circling the same economic object. A yield-bearing stablecoin may not be a deposit in legal form. It competes with one when users treat it as cash that can move quickly and earn something while it waits.

What banks are copying

Wall Street’s answer is to keep the stablecoin features that fit inside supervision: token form, faster settlement, links to digital-asset systems and finality that corporate users can reconcile.

That differs from issuing a dollar token backed by Treasuries or commercial paper. A tokenized deposit is still a claim on a bank. The ledger changes; the counterparty does not. For corporate treasurers, that distinction may be the selling point, especially if the network plugs into existing bank relationships, liquidity controls and compliance checks.

Recent bank projects point the same way. JPMorgan’s earlier JPM Coin work, BNY’s tokenized deposit service and the new shared system suggest tokenization is moving out of innovation labs and into wholesale cash pipes. Retail crypto users are unlikely to be first in line. Corporate treasury desks, payment platforms and financial institutions already keeping balances at large banks are the more obvious audience.

Launch timing may matter less than client adoption. If the system works, large banks can tell clients they offer stablecoin-like settlement without stablecoin balance-sheet risk. The pitch is plain: faster money, familiar counterparty, bank oversight.

Who gets pinched

Crypto-native firms still have a case. Public-chain stablecoins are liquid, widely traded and embedded across exchanges, wallets and DeFi protocols. A bank consortium product may be safer and cleaner for regulated institutions, but it could also be slower to open, less composable and less attractive to users who prize portability over custody.

Competition is already showing up at the product level. Revolut’s US bank plans to offer stablecoin services alongside FDIC-insured products, according to The Block’s summary of Reuters reporting. Coinbase has invested in Ethena and flagged a new partnership, while the fight over incentives has become a lobbying flashpoint, according to The Block’s report on Coinbase and Ethena.

Those moves frame the customer question: insured deposits with token rails, or crypto-native balances with richer rewards? Segmentation is the likely answer. Regulated corporates may choose tokenized deposits if they get instant settlement without changing risk committees. Crypto users may stay with stablecoins if rewards, cross-platform use and exchange liquidity remain better.

For stablecoin issuers, the uncomfortable point is that banks do not need to win every use case. Defending the richest pools of operating cash may be enough. Corporate deposits are sticky until a payment rail makes them less sticky. The consortium is designed to ensure that if tokenization loosens that grip, the replacement still runs through the same institutions.

Regulators choose their rail

The US debate fits a broader policy pattern. Central banks and regulators are not ignoring stablecoins. They are deciding which version of digital cash they can supervise without losing control of the monetary perimeter.

Europe’s answer is more explicit. Isabel Schnabel of the European Central Bank has argued that the digital euro is needed to counter stablecoin risks and preserve stability, while some reserve frameworks could leave 30 per cent to 60 per cent of backing assets in commercial-bank deposits, according to The Block’s coverage of Schnabel’s remarks.

“The appropriate response is therefore not to resist innovation but to ensure that it develops within a framework that preserves stability”

Isabel Schnabel, European Central Bank

That is close to the hidden logic of the US bank network. It accepts that programmable, tokenized money is coming. It refuses to let private issuers set the default rules for how that money moves, who earns the spread and what happens when payment balances begin to look like deposits.

For JPMorgan, Citi and Bank of America, the project is a boundary-setting exercise more than a conversion to crypto. Tokenization can come inside the system if the claim remains on a bank, the compliance perimeter stays intact and the economics of deposits do not migrate wholesale to crypto issuers.

Stablecoins proved that users want digital dollars that settle fast. The banks are conceding that product insight while contesting the business model. In 2026, tokenized deposits have become Wall Street’s attempt to keep the economics of bank money from moving outside the banks.