Major U.S. Banks Launch Tokenized Deposit Network to Counter Stablecoins by 2027

Headline: Major U.S. Banks Back Tokenized Deposit Network, Targeting 2027 Launch to Counter Stablecoin Pressure A group of the largest U.S. banks is moving forward on a shared tokenized deposit network that aims to link traditional bank payment rails with blockchain infrastructure — a direct response to stablecoin firms pushing deeper into payments and corporate finance, The Wall Street Journal reports. What’s planned - The Clearing House, the real-time payments operator owned by JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and other big commercial banks, will run the new system. - The network is expected to go live in the first half of 2027 and will be open to banks across the United States. - It will enable tokenized deposits to move instantly and settle 24/7 by bridging existing bank systems with blockchain tech — keeping customer funds inside the regulated banking system rather than shifting them to crypto-native stablecoins. Why banks are building it - Executives see it as a strategic move to protect deposit franchises as stablecoins and crypto firms win more payments and corporate business. - Tokenized deposits preserve the same credit risk profile, regulatory treatment and accounting treatment as traditional deposits, making it simpler for banks to offer blockchain-based payments without upending existing compliance frameworks. Voices from the industry - Clearing House CEO David Watson called the project “a big move for the banks,” saying the industry faces a “radically different” future in on-chain payments and finance. - Citi’s head of services, Shahmir Khaliq, framed the network as reinforcing banks’ roles in financing, money management and capital markets. - Bank of America’s Mark Monaco said clients are not “beating down the door” for tokenized deposits but that there is interest and the network will keep banks ready as adoption grows. Technical and market details - Banks have not yet chosen the blockchain vendor that will underpin the network. Internally some banks call the project “the bridge,” others “the chain.” - The Clearing House expects large multinational corporations to be among the earliest adopters, using the system for programmable treasury operations, real-time liquidity management and cross-border payments. Context: competition and regulation - The initiative arrives as banks monitor and push back against crypto players that could siphon deposits via stablecoins. Financial institutions have also clashed with crypto firms over recently advanced U.S. stablecoin legislation; banks object to provisions they say allow for interest-like structures on stablecoins, while crypto firms call the bill a compromise. - Tokenized deposits are attractive to banks because they maintain the legal and accounting characteristics of bank deposits, easing integration under existing rules. Where banks already stand - JPMorgan has long used its private blockchain and internal JPM Coin for institutional payments, and more recently issued a deposit token called JPM Coin on Base (a public blockchain linked to Coinbase) for institutional clients. - Last year, major banks explored a joint stablecoin effort through the Clearing House and Early Warning Services (operator of Zelle). Why it matters for crypto markets - A bank-run tokenized deposit network could offer many blockchain-native capabilities (instant settlement, programmability, 24/7 operation) while keeping deposits within regulated institutions — potentially blunting stablecoin adoption among corporate treasury and large-scale payments use cases. Vendor selection, regulatory clarity and enterprise uptake will determine whether the network becomes a dominant bridge between traditional finance and on-chain payments. Source: The Wall Street Journal (reporting as summarized above).