JPMorgan, Citi Back Tokenized Deposit Network

Banks seek stablecoin-like payments without losing deposits

The core product is not a new stablecoin. The network would convert traditional bank deposits into blockchain-based tokenized deposits that can move across a shared ledger while remaining commercial bank money.

The system is expected to issue tokenized commercial bank money through a single-ledger framework. Participating institutions would use that framework to settle client transactions faster and more efficiently than legacy payment channels.

The network is designed for instant 24/7 settlement. That would address common payment frictions such as evening delays, weekend downtime and slower processing windows.

The project is also a direct response to private stablecoins. Banks are trying to offer customers faster around-the-clock payments without forcing them to move money into stablecoins issued by crypto companies.

The dollar-backed stablecoin market was cited at $322 billion. That figure explains why large banks now see stablecoins as a competitive threat rather than a niche crypto product.

Stablecoin adoption has accelerated over the past two years, making private digital dollar products more attractive to businesses and institutions. New legislation was also described as a possible catalyst that could make digital dollar products more useful for those users.

For banks, the strategic issue is deposit retention. Deposits support lending and credit creation. If customers move large amounts of cash into stablecoins, banks risk losing a key funding base.

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The Clearing House gives banks controlled infrastructure

The Clearing House is described as a real-time payments business owned by the big banks. Its role gives the project operators existing experience with regulation and transaction stability.

Using The Clearing House also gives JPMorgan Chase and its partners more control over network design, infrastructure rules and compliance than they would have on public stablecoin rails.

One file described the project as a “head-on strategic attack” on non-bank digital currency issuers because it aims to keep corporate liquidity inside the regulated domestic banking ecosystem.

The network is expected to serve corporate clients that want faster payment tools but still need legal certainty, regulated counterparties and deposit protection. Those clients could eventually use integrated liquidity services through existing banking partners rather than external stablecoin platforms.

Institutional clients would be able to access blockchain-style settlement benefits without giving up bank-based safeguards such as regulatory oversight and deposit insurance.

Corporate treasurers are described as seeking modern, programmable capital solutions, while compliance officers still want strict safety controls, legal certainty and strong institutional counterparty risk management.

David Watson, CEO of The Clearing House, said, “This is a big move for the banks.”

Shahmir Khaliq, Citi’s head of services, said the initiative represents “another step that effectively cements” the role banks play across payments, financing and capital markets.

The project marks a shift in the blockchain payments story. Crypto companies led the early push toward blockchain-based payments, but Wall Street is now building its own regulated version for bank deposits.

The banks are not launching a crypto asset for retail speculation. They are trying to tokenize deposits so money can move faster while still being treated as commercial bank money.

If launched as expected, the network would give corporate clients a bank-native alternative to stablecoins for treasury movement, settlement and payment workflows.