Key Insights
- Large financial institutions are adopting tokenized deposits and blockchain networks to defend deposit relationships and retain payment control.
- Rapid stablecoin growth and nonbank payment options pose emerging risks to traditional bank deposit funding.
- Community financial institutions should evaluate commercial client pain points and assess deposit exposure to emerging payment alternatives.
On 26 April 1956, Malcolm McLean’s Ideal X sailed from New Jersey, carrying 58 aluminum containers on its deck, a simple experiment that would reshape global trade. By replacing labor-intensive break-bulk loading with a standardized container system, McLean reduced loading costs from $5.83 per ton to $0.16 per ton. The innovation was not just the container itself, but the creation of a new infrastructure for moving goods.
Nearly 70 years later, finance is undergoing a similar transformation. The race around stablecoins, tokenized deposits, and digital assets is not simply about creating new forms of money; It is about building and controlling the rails that will determine how value moves in the future.
How Digital Assets Are Transforming Payments
For years, cryptocurrencies were viewed by most banks as a niche asset class rather than a competitive threat. With global supply now reaching almost $290B, stablecoins have changed that equation, enabling near-instant, around-the-clock payments across borders. As stablecoins become a viable means of payment and settlement, banks are increasingly confronting the possibility that customers could one day move money without relying on traditional bank accounts or payment rails. The threat to traditional banking is real: as stablecoins gain ground as a meaningful store of transactional value, they could reduce the deposits that banks rely on to fund lending and support customer relationships.
Competition is also being shaped by regulation. While banks are developing tokenized deposits to match the speed and programmability of stablecoins, policymakers are considering ways to give some nonbank payment providers more direct access to the payments system.
One example is the Federal Reserve’s proposal for “payment accounts,” sometimes referred to as “skinny” master accounts, which would provide institutions already legally eligible for Federal Reserve accounts with limited access to selected payment services. While still under consideration, the proposal would create a narrower account option for eligible institutions, not expand legal eligibility or grant banking powers.
How Big Banks Are Responding
Against this backdrop, some of the nation's largest financial institutions (FIs) are pursuing a common strategy: adopting blockchain technology to keep money and assets inside the regulated banking system and protect their deposits. Three moves define their response.
1. Building Tokenized Deposits
The Clearing House (TCH) — owned collectively by JPMorgan, Bank of America, Wells Fargo, Citibank, and peers — is building a shared tokenized deposit network targeted for 2027, described by TCH executives as a direct answer to stablecoins. The network will allow participating banks to issue tokenized deposits: programmable digital representations of commercial bank deposits designed to support around-the-clock transfers and clearing and settlement of tokenized deposits.
Tokenized deposits offer the speed and programmability of stablecoins (automated payments, real-time settlement and cross-border capabilities) while remaining regulated bank liabilities that support lending and preserve the deposit relationship. By keeping these digital assets on a permissioned ledger, institutions can deliver these benefits within the compliance and control framework institutional clients expect.
TCH expects the platform to appeal particularly to large multinational companies seeking programmable treasury capabilities, real-time liquidity management and more efficient cross-border payments.
2. Expanding Permissioned Blockchain Platforms
Beyond payments and deposits, large banks are also moving to tokenize traditional financial assets. For example, Goldman Sachs launched a tokenized real estate fund on its GS DAP (digital asset platform). A real estate fund managed by LRC Group launched using Goldman Sachs’ platform, with Apex Group and Archax providing fund services and digital-securities custody. The fund uses permissioned, institutional-grade infrastructure designed to preserve regulatory oversight, operational controls, and existing financial market structures.
Meanwhile, Citigroup is expanding access to private markets through tokenized shares of private companies using digital depositary receipts, enabling investors to gain exposure to private equity assets through a blockchain-based structure while maintaining traditional custody and regulatory frameworks. Others, including JPMorgan, continue to expand their permissioned blockchain networks supporting tokenized cash, collateral and securities settlement.
These actions show that big banks are positioning themselves to capture the broader benefits of tokenization across capital markets — not by replacing traditional finance, but by upgrading its underlying infrastructure.
3. Exploring Bank-Issued Stablecoins
While tokenized deposits appear to be the primary path for large banks, some institutions are also moving toward direct participation in the stablecoin market. On September 1, 2026, 21 financial institutions (including Bank of America, Citi, Goldman Sachs and Wells Fargo) announced a commitment to establish a stablecoin enterprise, subject to closing conditions, targeting the launch of a US dollar-denominated stablecoin in the first half of 2027.
A bank-backed stablecoin could offer many of the same benefits as existing stablecoins (speed, programmability and global reach) while operating within a regulated framework. For large banks, the goal is not necessarily to replace tokenized deposits, but to ensure they remain relevant if stablecoins become a core part of future financial infrastructure.
What This Means for CFI Deposits and Payments
The emerging digital money landscape is unlikely to produce a single winner. Tokenized deposits and bank-issued digital assets could gain traction in institutional markets alongside stablecoins, with adoption shaped by compliance requirements, interoperability and customer needs. Stablecoins could also serve wholesale, institutional and retail uses, rather than remaining concentrated in public blockchain ecosystems and decentralized finance.
The future debate, however, is less about whether banking will move on-chain and more about who will control the infrastructure through which digital money moves. The largest banks are positioning themselves to ensure that, even as technology changes, regulated banks remain at the center of payments, deposits, and financial intermediation.
How CFIs Can Be Proactive
CFIs don’t need to replicate the largest banks’ strategies, but they should understand how these developments could affect their customers and funding. Five practical steps can help:
- Identify customer payment pain points. Ask commercial clients where cross-border delays, payment cutoffs or limited after-hours availability create problems. Use those conversations to identify actual demand rather than assuming customers want blockchain-based services.
- Assess deposit exposure. Review customer transfers to and from digital-asset platforms and identify relationships that could shift balances to alternative payment providers. For material exposures, evaluate how faster or more volatile outflows would affect liquidity needs.
- Ask providers about access and readiness. Discuss tokenized-deposit and digital-payment plans with core providers, correspondents, and payment partners. Before considering participation, clarify availability, integration requirements, costs, reconciliation processes and the responsibilities your institution would retain.
- Address today’s service gaps. Evaluate whether existing real-time payment options and better treasury-management tools could solve the customer problems you identify. Improving speed, availability, and transparency may be more useful near term than adding a token-based product.
- Establish a decision framework. Assign responsibility for monitoring developments and set criteria for considering a pilot, including demonstrated customer demand, a viable business case, partner readiness and acceptable compliance and operational risks. This creates a deliberate path forward without committing prematurely.
The priority for CFIs is to understand customer needs, protect deposit relationships, and identify where new payment capabilities could add value. Taking those steps now can help institutions make informed decisions as the technology, and the opportunities to participate, evolve.
