Major US banks to launch tokenized deposit network: report

The planned network aims to connect traditional banking rails to blockchain infrastructure for 24-hour settlement capabilities.

The biggest banks on Wall Street would launch a token deposit network in the first half of 2027.

This effort is led by Clearing House, a real-time payments company co-owned by major financial institutions, including JPMorgan Chase, Bank of America, Citigroup and Wells Fargo.

Project to connect traditional payments with blockchain

The Wall Street Journal reports that the project, called “the bridge,” aims to connect traditional bank payment systems to blockchain infrastructure so that tokenized deposits can be transferred instantly with 24/7 settlement. It also states that the underlying blockchain will be built through a partnership with a third-party provider not yet selected.

“This is a big step for banks,” said David Watson, chief executive of Clearing House, who said the sector faces a “radically different” future when it comes to on-chain payments and finance.

Citi sees this initiative as an extension of the role banks already play in the financial system. The move is “another step that effectively cements” the role of banks in financing, financial management and capital markets, said Shahmir Khaliq, head of services at the company.

At the same time, banks are wary of stablecoins, fearing their use could siphon deposits away from businesses. Financial institutions and crypto institutions have been at odds for months over recently advanced legislation that would allow the latter’s clients to earn interest on their stablecoin holdings.

Adoption demand remains progressive

The report states that all US banks will have access to the tokenized depository network, with possible use cases including real-time liquidity management, programmable treasury operations and cross-border payments. The Clearing House also expects large multinationals to be among its first users.

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On the other hand, Mark Monaco, head of global payment solutions at Bank of America, said customers are not yet “knocking on the door” for tokenized deposits. However, he also revealed that there is growing interest in the product, further admitting that adoption would take time.

JPMorgan has already tested JPM Coin, an in-house tokenized deposit system for settling payments on its private blockchain. More recently, the company also launched a token on Base for its institutional clients.

The latest development follows discussions last year between major financial institutions on the creation of a common stablecoin through the Clearing House and early warning services. Although this issue is still under investigation, the WSJ said that some banking industry executives are still unsure of the benefits these digital assets offer outside of cross-border payments.