
On tokenized deposits, a confession: there is a utility that I had not previously considered and am now convinced is legit: free marketing. Take the below announcement from SoFi on their "tokenized deposit" that is FDIC insured, pays a whopping 4.4% interest, and is instantly convertible to their stablecoin. What's not to love? The Suit Simps are very excited by it. The problem? There's literally nothing the token part adds that can't be offered by a vanilla bank account. Accounts are FDIC insured. Accounts pay yield. Accounts are convertible to anything and everything. Meanwhile, because it's a deposit and not a stablecoin, it is only available to KYC'ed bank customers, and the only thing they can do with it is send the deposit to clients of the same bank, while the bank retains the right to refuse such a transfer or debank the customer outright. No liquidity, fungibility, atomicity, or composability. Just like a bank account. I realized my error in judgement just recently when I was told by a friend who had spoken to a Senior Person at a Very Big Bank that is all about tokenized deposits. The banker was asked what the point of all of this was. His response: "it's the cheapest marketing we've ever had"
