The largest U.S. banks are preparing to launch a tokenized deposit network in the first half of 2027, a move aimed at staving off competitive pressure from crypto companies that have sought to expand into traditional banking territory under the Trump administration, according to a Wall Street Journal report.
The new network will be operated by the Clearing House, the real-time payment system co-owned by JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and other large commercial banks. It will connect traditional payment rails with the infrastructure that digital assets run on, allowing tokenized deposits — standard bank deposits represented as digital tokens on a blockchain — to move instantly with 24/7 settlement.
“This is a big move for the banks,” Clearing House Chief Executive David Watson told the Journal, as the industry faces a “radically different” future around on-chain payments and finance.
The network, referred to as “the bridge” by some participating banks and “the chain” by others, will be available to banks across the United States. The underlying blockchain will operate through a partnership with a vendor that has not yet been chosen.
Tokenization, the practice of representing traditional assets such as stocks, bonds, and funds as digital tokens on a blockchain, has been gaining momentum on Wall Street. Major exchanges are preparing to launch tokenized securities platforms, and banks and asset managers have rolled out tokenized money-market funds.
Banks have increasingly viewed tokenized deposits as preferable to stablecoins, the cryptocurrency-style tokens often pegged to the dollar, because tokenized deposits retain the same credit-risk profile, regulatory expectations, and accounting treatments as conventional deposits. They also keep deposits within the banking system rather than allowing them to flow to crypto firms.
The Clearing House expects large multinational corporations to generate much of the initial demand for the network. Use cases include programmable treasury operations, real-time liquidity management, and cross-border payments.
The network marks “another step that effectively cements” the role banks play in financing, money management, capital markets, and more, said Shahmir Khaliq, head of services at Citi.
Mark Monaco, head of global payments solutions at Bank of America, said clients aren’t necessarily “beating down the door” for tokenized deposits but that there has been some interest and the new network would ensure banks are well-positioned. “With any sort of new adoption, it takes time,” Monaco said.
JPMorgan, the largest U.S. bank, has already used its own internal tokenized deposit system, JPM Coin, to settle payments on its private blockchain. More recently, the bank launched a deposit token on Base, a public blockchain affiliated with crypto exchange Coinbase Global, limited to institutional clients.
Last year, the megabanks explored a joint stablecoin consortium through the Clearing House and Early Warning Services, the operator of the peer-to-peer payment system Zelle, the Journal reported. Some bank executives have questioned what use cases stablecoins could offer beyond cross-border payments, though the banks could still issue stablecoins in the future if demand warrants.