Big US banks plan tokenized deposit network for 2027 launch

JPMorgan Chase, Citigroup, Bank of America and other major U.S. banks plan to launch a tokenized deposit network in the first half of 2027, a coordinated push to keep crypto firms from siphoning deposits under a friendlier regulatory climate.

"The industry faces a radically different future around on-chain payments and finance," David Watson, chief executive officer of the Clearing House, which will operate the network, said in an interview.

The network will connect traditional payment rails with blockchain infrastructure, allowing tokenized deposits to settle around the clock. The Clearing House, co-owned by the participating banks, expects large multinational corporations to be the primary early adopters, with use cases spanning programmable treasury operations, real-time liquidity management and cross-border payments. A blockchain vendor has not yet been selected. Internally, some banks have referred to the project as "the bridge" while others call it "the chain."

The move marks the industry's most significant effort to date to defend its deposit base against stablecoins, which have gained traction as crypto-friendly legislation advances in Washington. Unlike stablecoins, tokenized deposits carry the same credit risk, regulatory treatment and accounting standards as conventional deposits, keeping funds inside the banking system rather than on crypto balance sheets.

The initiative comes as banks brace for the potential widespread adoption of stablecoins, especially if crypto firms can lure deposits away from traditional institutions. The CLARITY Act, stablecoin legislation advancing through Congress, has intensified those concerns. Banks remain dissatisfied that proposed rules leave room for interest-like features on stablecoins, while crypto firms have described the current proposal as a compromise. The Clearing House network would offer a bank-regulated alternative that keeps deposits within the existing regulatory framework.

Tokenization has been gaining momentum across Wall Street. Major exchanges are preparing to launch tokenized securities platforms, while banks and asset managers have rolled out tokenized money-market funds. JPMorgan already operates an internal tokenized deposit system called JPM Coin on its private blockchain and recently extended a version to Base, a public blockchain affiliated with Coinbase Global, for institutional clients. The new network would put similar capability within reach of banks across the U.S.

Citi's head of services, Shahmir Khaliq, said the network represents "another step that effectively cements" the role banks play in financing, money management and capital markets. Bank of America's head of global payments solutions, Mark Monaco, offered a more measured view, acknowledging that clients are not "beating down the door" for tokenized deposits but that the network would ensure banks are positioned when demand builds. "With any sort of new adoption, it takes time," Monaco said.

The banks have not ruled out issuing their own stablecoins if demand emerges. Last year, the megabanks explored a joint stablecoin consortium through the Clearing House as well as Early Warning Services, the operator of Zelle, the Wall Street Journal reported. For now, the tokenized deposit network is the industry's opening move in a payments environment that is shifting faster than many expected.

This article is for informational purposes only and does not constitute investment advice.