CoinDesk
JPMorgan Chase, Bank of America, Citigroup and other major US lenders announced Friday a plan to launch a shared tokenized-deposit network through The Clearing House by the first half of 2027, enabling round-the-clock blockchain-based settlement of bank deposits. The initiative is the largest coordinated move yet by incumbent banks to compete directly with stablecoins such as Circle's USDC and Tether's USDT, which currently dominate onchain dollar volume for trading, cross-border payments and an emerging class of savings products.
Why it matters
The push comes against an accelerating backdrop: the GENIUS Act has set a federal framework for payment stablecoins, and a Jefferies estimate from March projected stablecoins could drive a 3% to 5% runoff in core US bank deposits over the next five years while shaving roughly 3% off average bank earnings. "Following the GENIUS Act, a competition seems to be emerging between stablecoins, tokenized deposits and tokenized money market funds to become the preferred onchain cash instrument," said Reid Noch, VP of US equity market structure at TD Securities. Tokenized deposits would let banks bring customers onchain while keeping funds inside the regulated banking perimeter — a structural answer to deposit migration rather than a payments-efficiency tweak.
Market impact
Unlike stablecoins, tokenized deposits remain inside the banking system and are not bearer instruments freely transferable on public chains. The Clearing House network extends a private-blockchain model that JPMorgan, Citi and others have piloted internally for years, now stitching it across multiple lenders. If it ships on schedule, corporate treasury, B2B payments and cross-border wires gain a 24/7 onchain rail that runs on bank balance sheets rather than stablecoin reserves — a credible institutional alternative that could blunt USDC and USDT's growth into corporate use cases. For the broader market, the announcement is also a marker that the largest US banks now publicly accept that blockchain rails are the settlement layer they need to compete on, not just experiment with.
Frequently asked questions
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What is the new tokenized-deposit network US banks are building?
JPMorgan Chase, Bank of America, Citigroup and other major US lenders are building a shared tokenized-deposit network through The Clearing House, targeting a first-half 2027 launch. It enables round-the-clock blockchain-based settlement of bank deposits across the participating banks.
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How do tokenized deposits differ from stablecoins like USDC and USDT?
Tokenized deposits represent a claim on a bank deposit that moves across blockchain rails, but the underlying funds remain inside the regulated banking system. Stablecoins such as USDC and USDT are issued by non-bank entities, circulate freely on public chains, and are backed by reserve assets rather than FDIC-insured…
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Why are US banks launching tokenized deposits now?
Banks are responding to stablecoin growth after the GENIUS Act set a federal framework for payment stablecoins. A Jefferies estimate from March projected stablecoins could drive a 3% to 5% runoff in core US bank deposits over five years and reduce average bank earnings by roughly 3%.
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Will tokenized deposits work on public blockchains like Ethereum?
No. The Clearing House network extends the private-blockchain model JPMorgan, Citi and others have piloted internally for years and is deliberately walled off from open public-chain ecosystems. Tokenized deposits will not be freely transferable the way USDC and USDT are on public networks.
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When will the tokenized-deposit network actually go live?
The participating banks are targeting the first half of 2027 for the shared network launch. Until then, the legal structure of the tokenized claim on deposits and any Federal Reserve or OCC guidance on interoperability with stablecoins will shape the final product.
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