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

Headline: Top U.S. Banks Back Tokenized Deposit Network, Aiming for 2027 Launch to Counter Stablecoin Push Major U.S. banks are preparing a collective move into blockchain-based payments: the Clearing House — the real-time payments network owned by JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and other large lenders — will operate a new tokenized deposit network slated to roll out in the first half of 2027, the Wall Street Journal reports. The platform will be open to banks across the United States. What the network will do - Connect existing bank payment rails to blockchain infrastructure so deposits can be represented as tokens and moved on-chain. - Allow tokenized deposits to transfer instantly and settle around the clock, while keeping funds inside the regulated banking system rather than moving them to private crypto issuers. - Target use cases such as programmable treasury operations, real-time liquidity management and faster cross-border payments — with large multinational companies expected among the earliest users. Why banks are building it Banks see the move as a defensive and strategic response to stablecoin adoption by crypto firms, which they fear could siphon deposits if customers and corporates migrate payment and treasury activity off-bank. Clearing House CEO David Watson described the project as “a big move for the banks,” saying the industry faces a “radically different” future for on-chain payments and finance. Design choices and regulatory rationale Participating banks favor tokenized deposits because they are legally and economically equivalent to ordinary bank deposits on-chain: they carry the same credit risk profile, regulatory treatment and accounting approach, the Journal notes. That makes it simpler for banks to adopt blockchain-enabled payments without upending existing rules and oversight — unlike some stablecoin models. Status and naming Banks have not yet picked a blockchain vendor for the network. Internally the effort has been called “the bridge” by some and “the chain” by others. Industry context The project comes amid growing tension between banks and crypto firms over stablecoin regulation in Washington. Banks have objected to draft rules that, in their view, leave room for interest-like constructs on stablecoins; crypto firms have called the proposal a compromise. Banks also face competitive pressure as crypto companies expand payments and corporate finance offerings. Comments from bank executives - Shahmir Khaliq, Citi’s head of services, said the network strengthens banks’ role in financing, money management and capital markets. - Mark Monaco, head of global payments solutions at Bank of America, said clients are not “beating down the door” for tokenized deposits yet, but there is interest and the network would keep banks prepared as adoption grows. What banks have already done JPMorgan has used its internal JPM Coin on a private blockchain for institutional payments and has also issued a deposit token named JPM Coin on Base, a public blockchain connected to Coinbase, with access limited to institutional clients. Last year, major banks explored a joint stablecoin effort through the Clearing House and Early Warning Services, the operator of Zelle. Bottom line The Clearing House network represents a coordinated effort by legacy banks to bring on-chain capabilities into the regulated banking system rather than cede corporate and payments business to crypto-native stablecoins. With a 2027 target date and vendor decisions still pending, the initiative will be closely watched by banks, corporates and crypto firms alike. (Source: Wall Street Journal)