When BlackRock chief executive Laurence Fink asserted last year that “every asset can be tokenized,” he specifically mentioned stocks, bonds and funds. His firm is a leader among those fulfilling the prophecy: Over $20 billion of real-world asset (RWA) value is distributed on blockchain, or well over $300 billion including stablecoins, as some brokerages, market infrastructures like Depository Trust Co. and the New York Stock Exchange are beginning to push tokenization of securities into a higher gear.
That momentum is spreading across the balance sheet to tokenized deposits, with particular implications for interbank and cross-border payment efficiency.
The concept has been brewing for a while. Three years ago JPMorgan Chase & Co.’s digital-asset arm, then known as Onyx and promoting JPM Coin, produced a report with Oliver Wyman positioning instantaneously settled deposit tokens as “a stabilizing force in the digital money ecosystem” operating within well understood regulatory, financial-stability and customer-protection frameworks.
In November 2025, following testing with B2C2, Coinbase and Mastercard, JPMorgan’s Kinexys blockchain unit rolled out JPM Coin (JPMD) “onchain native digital payments” for institutional clients. At the same time, JPMorgan and DBS Bank of Singapore said they were exploring an interoperability framework for “exchangeability and settlement of tokenized deposits” between their respective Kinexys Digital Payments and DBS Token Services ecosystems.
U.S. Treasury debt and commodities combined account for a majority of tokenized asset value (excluding stablecoins). Source: rwa.xyz
Meanwhile, Citigroup CEO Jane Fraser talked up the advantages of tokenized deposits over stablecoins; Bank of New York Mellon Corp. launched an initiative in Treasury Services to support real-time and cross-border transactions across its global network, followed by a January 9 announcement of institutional onchain capabilities “beginning with collateral and margin workflow use cases”; State Street Corp. highlighted tokenized deposits and stablecoins in introducing its Digital Asset Platform; U.S. Bank joined other majors in forming a digital-asset business unit, which it named Digital Assets and Money Movement; and international regulatory bodies got into the deposit-tokenization conversation.
Competing Digital Monies, a Bank for International Settlements working paper, evaluated “new contenders [that] are vying to challenge bank deposits as a form of retail money for payments”: private tokens of digital platform operators such as Big Techs and China’s AliPay and WeChat Pay; private stablecoins on blockchains and other forms of distributed ledger technology (DLT); and central bank digital currencies (CBDCs).
Hyun Song Shin of the BIS
Two models – a “public option” of interoperable private payment instruments; and a CBDC providing general access to public digital money – are “essentially equivalent for the industrial organization of the payment system,” concluded BIS Monetary and Economic Department head Hyun Song Shin and three co-authors. “We find that, even if they may lead to some degree of disintermediation, announcement both options can contribute to increasing financial inclusion and improving social welfare.”
In Tokenization of Financial Assets, an International Organization of Securities Commissions (IOSCO) report, tokenized deposits were seen as a potentially “viable alternative” where commercial bank money is used in conventional payment systems and financial market infrastructure. However, “there are challenges that come with their use. For instance, there is a high likelihood of market fragmentation where every bank seeks to launch on different private chains with their own bespoke standards” and where interoperability may be lacking.
Noting the early onchain momentum of stablecoins, IOSCO pointed to additional risks to investors “as compared to conventional settlement processes . . . Amongst other issues, the BIS has also pointed out that stablecoins are not being settled in central bank monies, and investors can be exposed to price fluctuations given their availability for trading.”
IOSCO and the Committee on Payments and Market Infrastructures (CPMI) have issued joint guidance on the application of the Principles for Financial Market Infrastructures (PFMI) to systemically important stablecoins.
In the U.S., Federal Deposit Insurance Corp. Acting Chairman Travis Hill said in November that guidance on tokenized deposit insurance was under consideration. Representing state regulators, the Conference of State Bank Supervisors sent a comment letter to Hill, Federal Reserve Vice Chair for Supervision Michelle Bowman and Comptroller of the Currency Jonathan Gould saying they all should work together to “clarify the regulatory treatment of and supervisory expectations for tokenized deposits, with clear operational guidance addressing” deposit insurance and other compliance and policy matters.
Dave Ramsden, Bank of England
Dave Ramsden, Bank of England deputy governor, markets and banking, in a January 14 speech referenced a November consultation paper on a “proposed regulatory regime for sterling-denominated systemic stablecoins.”
He stressed the central bank’s mission “to ensure that the public can have the same trust in new forms of money as they do in existing ones” in a proposed regime “designed to maintain financial stability and enable systemic stablecoin issuers to operate viable business models,” including giving such issuers access to a deposit account at the Bank of England.
“To maintain trust in sterling stablecoins we are also considering what failure arrangements might need to be in place both now and in the future, as the U.K. systemic stablecoin sector develops . . . In the longer term,” Ramsden allowed, “trust in stablecoins may require some form of insurance scheme analogous to that which applies to bank deposits and a statutory resolution arrangement that ensures coinholders are preferred creditors in any insolvency process.”
“Strong partnerships with regulators represent a critical part of the journey to ensure a robust and trusted ecosystem,” Kinexys by JPMorgan global co-heads Kara Kennedy and Naveen Mallela said in a December joint interview. “As with all JPMorgan’s products, across jurisdictions we engage regulators both directly and through industry groups to ensure compliance with existing standards and regulations.”
They said that as clients of the bank looked into digital finance and blockchain payments, a trusted product and relationship were important to them. Tokenized infrastructure “is no longer theoretical” and is capable of “restructuring liquidity, settlement and digital asset workflows at a faster rate.”
Kara Kennedy and Naveen Mallela of JPMorgan’s Kinexys
State Street chief product officer Donna Milrod similarly observed, “Clients want trusted infrastructure that makes digital assets practical, not experimental.” The bank’s Digital Asset Platform “delivers that foundation in a way that is secure, interoperable and integrated so institutions can scale with confidence. This platform is built on a client partnership model that ensures ongoing evolution in line with market needs and regulatory expectations, reduces complexity while opening the door to innovation in a rapidly evolving digital financial landscape.”
The JPM-Kinexys leaders further contended that technology alone will not scale tokenization. Strong organizational structures and collaborations are also essential.
“There is a need to manage complex interdependencies, integrate with legacy infrastructure, and navigate legal and regulatory environments that have not yet adapted to these new innovations,” Kennedy and Mallela explained. “While we are seeing increased acceptance of tokenized assets, notably tokenized money market funds, institutions need to be able to identify an exact value from any initiative, through an increase in efficiencies or new investment opportunities.”
A collaboration announced on January 7 leading to native issuance of JPM Coin on Digital Asset’s Canton Network “moves the industry forward in transacting on public blockchains,” Mallela said. “JPM Coin delivers the security of bank-issued deposits and settlement, combined with the speed and innovation of 24/7, near real-time blockchain transactions. In bringing JPM Coin onto Canton, we can further increase efficiency and unlock liquidity."
A tokenized deposit pilot arrived in the U.S. via London, Ontario-headquartered VersaBank as USDVB, the U.S. dollar version of proprietary Digital Deposit Receipts (DDRs) which are now branded as VersaBank Real Bank Deposit Tokens (RBDTs).
“VersaBank fundamentally believes licensed banks, as the trusted, regulated safekeepers of personal and business cash assets and other valuables, are naturally positioned to do the same for digital currencies,” founder and president David Taylor said in an August press release statement.
David Taylor of VersaBank
Described by Taylor as “the first operational, tokenized deposit issued by a nationally licensed bank in the United States," and designed to meet anti-money laundering and other compliance requirements, the U.S. dollar tokens “represent the next step in the evolution of digital assets for both deposits and payments, and, importantly, a superior alternative to stablecoins based on their one-for-one representation of actual cash on deposit with our bank, the legal ability to pay interest, and FDIC insurance,”
The offering is “not only a significant opportunity for VersaBank USA itself to generate very low-cost deposits to fund our U.S. growth,” the executive continued, “but also the ideal, market-ready solution for U.S. banks, payment providers and other financial businesses to quickly, seamlessly and cost-effectively enter this critical next stage of the digital commerce evolution.”
VersaBank, which calls itself a business-to-business digital banking and cybersecurity technology solutions provider, said it would seek “non-objection” clearance from the Office of the Comptroller of the Currency before a formal commercial launch of USDVB.
In the U.K., Lloyds Banking Group CEO Charlie Nunn has outlined a way to streamline homebuying processes and documentation with tokenized deposits and smart contracts. At the FT Global Banking Summit in December, as reported by Mortgage Introducer, Nunn said “blending blockchain-backed deposits together with sophisticated AI models could revamp the entire homebuying grind – from legal checks to document chasing.”
In a more general sense, Nunn argued that tokenized deposits “offer the same instant movement of money [as stablecoins] but with the oversight lenders and regulators expect.” Lloyds reportedly aims to have “a token system up and running by 2027 as part of its core infrastructure.”
Nunn claimed to be already ahead of pioneering tokenization ecosystems such as Singapore’s.
Lloyds, Barclays, Citi, HSBC and several others took part in a U.K. regulated liability network (RLN) tokenization project that culminated in September 2024 with three reports on its experimentation phase. A UK Finance tokenized deposit pilot got underway last year.
Barclays announced on January 7 an investment in Ubyx, a U.S.-based clearing system for digital money including tokenized deposits and regulated stablecoins.
In 2024, after two years of piloting asset-tokenization use cases in Project Guardian, the Monetary Authority of Singapore (MAS) started the Global Layer 1 cross-jurisdiction, multi-purpose shared ledger initiative. The GL1 white paper cited the BIS definition of unified ledger “as a new type of financial market infrastructure that could capture the full benefits of tokenization by combining central bank money, tokenized deposits and tokenized assets on a programmable platform.”
The Monetary Authority of Singapore’s GL1 reference model.
“GL1 focuses on the provision of a shared ledger infrastructure for financial institutions to develop, deploy and use applications for financial industry use cases along the value chain, such as issuance, distribution, trading and settlement, custody, asset servicing, and payments,” said the MAS document. “This could enhance cross-border payments as well as the cross-border distribution and settlement of capital market instruments.”
Moody’s Corp., a participant in the Project Guardian fixed-income workstream, said in July 2024 that it “plans to provide risk analysis for tokenized fixed-income products. This may involve fixed-income securities, fund units, stablecoins, tokenized deposits and other components of the digital finance ecosystem. Moody’s independent risk assessment is intended to enhance market transparency, reduce systemic risks, and facilitate the growth of the tokenization industry.”
Another Asian central bank, the Reserve Bank of India, embarked on a tokenized deposit pilot last fall involving commercial banks and centered on the e-rupee CBDC.
In November in Singapore, UBS signed a memorandum of understanding with digital payments giant Ant International intending to leverage the blockchain-based UBS Digital Cash to support Ant’s global treasury operations, and to jointly explore “innovations in tokenized deposits.”
Young Jin Yee, co-head of UBS Global Wealth Management Asia-Pacific and country head, UBS Singapore, said the collaboration “builds on the momentum of our UBS Digital Cash pilot launch last year. By combining our expertise in digital assets with Ant’s advanced blockchain technology, we are working together to deliver a real-time, multi-currency payment solution that sets standards for transparency and efficiency,” while underscoring “our commitment to empowering our clients with best-in-class platforms and providing them with greater access to global financial markets.”
In December, Ant, HSBC and the Swift messaging network announced completion of a proof of concept for cross-border transfer of tokenized deposits using ISO 20022 standards – “a key milestone in [their] efforts to help businesses unlock the full benefits of tokenization for enhanced liquidity, programmable finance, and 24/7 real-time settlement.”
“By enabling tokenized deposits to move securely and efficiently across borders, we are giving our corporate clients more choice in how they manage liquidity globally; with the familiarity of traditional banking and the benefits of next-generation digital infrastructure,” commented Lewis Sun, global head of Domestic Payments and Emerging Payments, HSBC. The bank’s Tokenized Deposit Service is a blockchain based instant atomic settlement offering for corporate clients to manage and move funds in real time, 24/7 across participating HSBC locations.