Major US Banks Launch Tokenized-Deposit Network to Compete with Stablecoins

Major US banks are building a shared tokenized-deposit network that could bring 24/7 blockchain payments into the regulated US banking system — and take on crypto-native stablecoins in the process. What’s happening - JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are spearheading a project run by The Clearing House (the bank-owned payments firm) to let participating banks clear and settle tokenized deposits around the clock, while linking blockchain activity to existing payment rails. - The network is aimed first at multinational corporations and is pitched for programmable treasury functions, real-time liquidity management, automated payouts and cross-border transfers. - More than a dozen other institutions have signed on, including BNY, HSBC, PNC, Santander, TD Bank, Truist and U.S. Bank. A blockchain technology provider has not yet been selected. What a “tokenized deposit” is — and how it differs from a stablecoin - Tokenized deposits are digital claims on money held at a commercial bank. The funds remain on the bank’s balance sheet and receive conventional deposit legal protections. - Stablecoins, in contrast, are crypto-native tokens that generally sit outside the regulated banking system. Both offer programmable settlement and 24/7 transfers, but deposit tokens keep customer funds inside regulated banks. Why banks want this - Several banks already run proprietary on-chain payment services (JPMorgan’s Kinexys averages more than $7 billion in daily volume and has processed over $40 trillion since launch; Citi Token Services moves billions across the US, UK, Singapore and Hong Kong). But those systems are largely closed networks. - A shared Clearing House infrastructure would let tokenized money move between banks and scale institutional on-chain payments, addressing limits of siloed platforms. JPMorgan Payments co-head Max Neukirchen said a regulated market infrastructure is needed to scale tokenized-deposit clearing and settlement. Competitive backdrop: stablecoins and regulation - Stablecoins already dominate the crypto payments landscape: roughly $263 billion are in circulation, giving crypto-native payment providers a large head start. - The banking initiative comes as industry lobbying and legislation over stablecoins heat up. Banking groups — including the American Bankers Association, Independent Community Bankers of America and 76 state banking associations — want the Senate to tighten stablecoin rules in the CLARITY Act to stop crypto platforms from offering incentives that act like interest on deposits. - Current bill language would bar interest-like returns on passively held stablecoins but allow rewards linked to payments and qualifying activity; banking groups warn such incentives could siphon deposits from banks, reducing lending capacity. - Goldman Sachs has broken from some peers by supporting movement of the CLARITY Act despite concerns, arguing a federal market structure would give clarity for digital-asset development. Other bank CEOs, including JPMorgan’s Jamie Dimon, have said the reward provisions could put regulated banks at a competitive disadvantage. Practical hurdles and timeline - For the Clearing House network to launch, participants must select the underlying blockchain technology, agree on technical and operational standards, and integrate the system with existing bank infrastructure — a challenging coordination task given the banks’ overlapping corporate client bases. - The Clearing House says it plans to expand access beyond the initial participants, potentially enabling smaller US banks to plug into shared blockchain payment infrastructure. - The project is targeting the first half of 2027 for initial rollout, though no formal launch date has been set. Multinational corporations will be the initial test cases to see whether regulated deposit tokens can match the speed and programmability of stablecoins without moving funds outside the banking sector. Why it matters If successful, the Clearing House initiative could give regulated banks a scalable, on-chain payments alternative that preserves deposit protections and keeps liquidity inside the banking system — directly challenging stablecoins’ current role in 24/7 programmable payments. But the outcome will depend on technical choices, interbank cooperation and how regulators define what’s allowed for stablecoins and tokenized deposits.