Major U.S. banks are preparing to move their deposits onto the blockchain. JPMorgan Chase, Bank of America, Citigroup, and other institutions have stated that they plan to launch a shared tokenized deposit network through the U.S. clearing house The Clearing House by the first half of 2027 at the latest, enabling bank deposits to have 24/7 settlement and on-chain transfer capabilities.
This move directly targets the rapidly growing stablecoin market. Currently, USDC and USDT are widely used in crypto transactions, cross-border payments, and some value storage scenarios. Banks are concerned that once stablecoins further penetrate the mainstream payment system, customer funds may flow from traditional accounts to crypto wallets, thereby eroding core deposits.
The goal is to keep the funds within the banking system.
The basic idea behind tokenized deposits is to map customers' bank deposits into digital tokens that can circulate on blockchain infrastructure. Unlike stablecoins, these funds do not leave the banking system; account relationships, compliance processes, and clearing control remain with the bank.
Reid Noch, Vice President of U.S. Equity Market Structure at TD Securities, stated that stablecoins, tokenized deposits, and tokenized money market funds are vying for dominance as "on-chain cash instruments." Banks' current push for related networks indicates that they consider stablecoins a real competitor.
Jefferies estimates deposit outflows at 3% to 5%.
A report by Jefferies in March estimated that stablecoins could lead to a 3% to 5% loss of core bank deposits over the next five years and reduce average bank profits by about 3%. This is also an important background for banks to accelerate the deployment of on-chain payments.
Supporters argue that tokenized deposits primarily target payment efficiency. Traditional wire transfers, especially cross-border remittances, are often costly and typically take one to two business days to complete. By adopting blockchain infrastructure, interbank fund transfers could potentially achieve near real-time processing and cover 24/7 settlement.
The Clearing House spearheaded the project.
According to the plan, this network will be spearheaded by The Clearing House and shared by multiple large banks. If the project proceeds smoothly, corporate payments and treasury management are likely to be the first application scenarios, as these clients place greater emphasis on compliance frameworks, fund security, and controllability within the banking system.
While both utilize blockchain infrastructure, the banking approach differs from the open networks promoted by the crypto industry. Commentator Noelle Acheson points out that banks have been testing private chains or closed systems for years, focusing on improving the efficiency of internal or inter-institutional transfers while maintaining tight control over users and transactions.
This means that even if large banks actively adopt blockchain technology, the new tokenized deposit network will still differ significantly from the stablecoin ecosystem on public blockchains. Stablecoins offer advantages such as greater liquidity, wider applicability, and free circulation within open networks; while bank tokenized deposits are more likely to attract corporate clients who wish to remain within their existing compliance frameworks.
If The Clearing House's network launches as planned, the competitive landscape of on-chain dollars may change. In the near future, stablecoins, tokenized deposits, and tokenized money market funds may engage in more direct competition in payments, clearing, and corporate treasury management.
