JPMorgan Chase, Citigroup, and other banking giants plan to launch a shared tokenized deposit network in 2027

According to Cryptopolitan, major U.S. banking institutions such as JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo are collaborating with The Clearing House to establish a shared tokenized deposit network, aiming for launch in 2027.

This series of initiatives aims to address the rapid expansion of stablecoins and cryptocurrencies in payments and corporate finance, and to maintain the market position of traditional financial institutions.

The tokenized deposit network is jointly owned by participating banks and operated by The Clearing House. Member banks across the U.S. can use this blockchain infrastructure to enable 24/7 real-time transfer of tokenized customer deposits.

Tokenized deposits differ from stablecoins; they represent actual bank deposits recorded on the blockchain, rather than independent digital assets. This distinction preserves the original credit risk profile of banks and the relevant regulatory and accounting frameworks.

The banking industry’s motivation is mainly due to concerns that stablecoins could drain liquidity from the banking system, especially since the CLARITY Act allows stablecoins to carry yield features, whereas the tokenized deposit network keeps funds within the regulated banking system.

Given the network’s excellent capabilities in cross-border payments and liquidity management, large multinational corporations are expected to be early users of the network.

Shahmir Khaliq, head of Citigroup’s service division, believes that this network is another significant step to enhance banks’ advantages in capital markets and financing.

Meanwhile, Mark Monaco, head of U.S. Bank’s Global Payments Solutions, adopts a more cautious stance, stating that clients do not yet have an “urgent need” for tokenized deposits, but there is some interest, and the network will help banks prepare for broader adoption.

Notably, among all participating banks, JPMorgan Chase has the most extensive experience. These pioneering efforts have laid a solid technological foundation for the development of this shared tokenized deposit network.

Specifically, JPMorgan has already operated JPM Coin on a private blockchain for institutional payments and has launched a deposit token for institutional clients on Coinbase’s public blockchain, Base.

#Tokenized Deposits