JPMorgan, Citi, Bank of America, and Wells Fargo are teaming up to build a shared tokenized deposit network, according to the Wall Street Journal. The project aims to launch around 2027 and will run through The Clearing House, which is jointly owned by many of the same large banks.
The network will turn regular bank deposits into digital tokens that move on blockchain rails. Therefore, banks hope to offer fast, 24/7 transfers that feel similar to stablecoins while keeping money inside the regulated banking system.
The move comes as dollar stablecoins handle billions in daily payments on public blockchains. They are starting to compete with banks for deposits and payment flows. As a result, major lenders are looking for ways to modernize their payment rails. They want to do this without giving up control of customer funds.
How the Tokenized Deposit Network Will Work
The Clearing House already runs key systems like the RTP real-time payments network and the CHIPS large-value clearing system. Now it plans to operate the new tokenized deposit network, connecting banks across the country to a shared blockchain-based settlement layer.
The network will convert customer deposits into blockchain-based tokens. These tokens can move instantly between participating banks. They can move at any time.
Then, when a transfer is complete, the system updates each bank’s records. It updates them so the blockchain movement matches the account balances.
Tokenized deposits are not the same as stablecoins. Instead, they are digital versions of regular bank deposits that stay on the bank’s balance sheet and remain covered by existing rules, including FDIC insurance where applicable.
Clearing House CEO David Watson told the Wall Street Journal that the project is “a big move for the banks” and that the industry faces “a radically different” future as money shifts on-chain. His comments highlight how seriously large banks now take blockchain-based payments and competition from crypto-native players.
JPMorgan also brings its experience with JPM Coin, a deposit token for institutions that runs on Coinbase’s Base network. The bank says JPM Coin “is a bank-issued deposit token, not a cryptocurrency or a stablecoin,” and it stresses that tokens are backed by actual deposits held at J.P. Morgan.
Now, the new network aims to extend that idea beyond a single bank. Consequently, big U.S. lenders want to offer programmable, always-on digital dollars that look more like crypto while still living inside traditional banking.
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