America's largest banks are preparing a direct response to one of crypto's fastest-growing products: stablecoins.
JPMorgan Chase, Bank of America, Citigroup and other major lenders said Friday that they plan to launch a shared tokenized deposit network through The Clearing House by the first half of 2027. The project would allow bank deposits to move across blockchain infrastructure with round-the-clock settlement, giving traditional bank money some of the same capabilities that have helped stablecoins gain traction.
The move highlights the growing competition to become the preferred form of cash on blockchain networks.
"Following the GENIUS Act, a competition seems to be emerging between stablecoins, tokenized deposits and tokenized money market funds to become the preferred onchain cash instrument," said Reid Noch, vice president of U.S. equity market structure at TD Securities.
Stablecoins, specifically Circle’s (CRCL) USDC and Tether’s USDT, currently dominate that market. The dollar-pegged tokens are widely used for crypto trading, cross-border payments and increasingly for savings products. But banks are concerned that if stablecoins become mainstream, deposits could migrate from traditional accounts into crypto wallets.
Tokenized deposits allow banks to bring customers onchain without losing control of their deposits. A customer’s bank deposit would be represented as a digital token that can move across blockchain rails. Unlike stablecoins, the funds would remain inside the banking system.
Noch said tokenized deposits address long-standing inefficiencies in global payments.
"Anyone who has ever wired money, especially internationally, knows the process can be expensive and often takes one or two business days to complete," said Noch. By using blockchain infrastructure, tokenized deposits could allow near-instant transfers around the clock while reducing costs and settlement frictions, he said.
The initiative also signals how far blockchain technology has moved into the financial mainstream.
"The biggest banks in America are voluntarily coming onchain," said Digital Chamber CEO Cody Carbone. "When the country's largest institutions decide the future of finance runs on blockchain, they're proving exactly what our industry has been building toward all along."
Still, the banking industry's approach differs sharply from crypto's vision of open networks.
Noelle Acheson, author of “Crypto is Macro Now,” noted that banks have spent years experimenting with private blockchain systems that move money internally while maintaining strict control over users and transactions. The planned Clearing House network expands that model across multiple banks but remains far removed from public blockchain ecosystems where stablecoins circulate freely.
Acheson argued that the project demonstrates that banks are taking stablecoins seriously despite public comments from some executives, including JPM CEO Jamie Dimon, who downplayed the threat. While stablecoins offer greater liquidity and flexibility, she said many corporate customers may prefer a bank-backed system that fits within existing compliance frameworks.
In a report in March, Jeffries said it estimates that stablecoins could drive a 3% to 5% runoff in core deposits over the next five years and shrink average bank earnings by about 3%.
The outcome could reshape how money moves on blockchain networks.
If successful, the Clearing House initiative could emerge as a significant competitor to stablecoins for corporate payments and treasury operations. At the same time, it underscores a broader trend: traditional finance is increasingly adopting blockchain technology, even as it competes with crypto-native alternatives built on the same infrastructure.