CoinDesk
Kraken parent Payward has agreed to buy Saldo Bank, a digital bank licensed in Lithuania, with regulatory approval still pending and closing expected in 2027. The move would give Kraken the European banking license it was pursuing and follows Kraken Financial becoming the first digital asset bank to receive a Federal Reserve master account in March. Bank-based digital money is also advancing: 7 U.K. banks have completed live tokenized deposit payments, while 25 U.S. banks are building a shared network for the same activity. Alessandro Hatami, founder of Pacemakers and former COO of Digital Banking at Lloyds Banking Group, argues that these advances could erase stablecoins' core treasury advantage.
Why it matters
Tokenized deposits reproduce stablecoins' programmable payment capability while remaining claims on banks. Unlike typical reserve-backed stablecoins, they can pay interest and may benefit from deposit insurance within applicable limits. A treasurer with an existing banking relationship may therefore have little reason to move a substantial balance to a separate issuer unless stablecoins provide better connectivity, cost or protection.
Coordination is the harder test. Stablecoins connect wallets, exchanges and apps across markets, while a bank-issued token may remain limited to approved holders. The Great British Tokenized Deposit initiative has completed pilot transactions, Germany's CBMT initiative completed its first live interbank payments in May, and The Clearing House is building a network backed by 25 U.S. banks. None yet connects to the others, but shared settlement in central bank money is moving from theory into practice.
Market impact
Interest economics could narrow the market further. The GENIUS Act takes effect in January and bars issuers from paying holders interest simply for holding stablecoins, while October OCC rules will assess partner rewards case by case. Tokenized deposits can pay interest, giving banks a direct answer to treasurers deciding where balances belong.
Stablecoins are unlikely to disappear.
Frequently asked questions
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What advantage do stablecoins retain over tokenized deposits?
Stablecoins retain self-custody, DeFi integration, broad wallet and exchange connectivity, cross-border reach and dollar access where local banking is weak or inflation erodes savings. Their likely market becomes narrower and more specialized.
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How do tokenized deposits differ from reserve-backed stablecoins?
A tokenized deposit remains a claim on a bank and can support programmable payments, while a reserve-backed stablecoin relies on the issuer's reserves and redemption arrangements. Eligible deposits can also earn interest and may benefit from deposit insurance within applicable limits.
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What must banks solve to compete more effectively with stablecoins?
Banks must connect separate tokenized-deposit networks through shared rules, compatible systems and settlement in central bank money. The U.K., German and U.S. initiatives show progress, but none yet connects to the others.
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How will the GENIUS Act affect stablecoin rewards?
Effective in January, GENIUS bars issuers from paying holders interest simply for holding stablecoins. Rewards distributed through partners remain a gray area under October OCC rules, which will be assessed case by case.
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Who may keep using stablecoins as banks adopt tokenized deposits?
Users who value self-custody, DeFi integration, cross-border settlement or access to dollar savings may continue using stablecoins. Corporate treasurers face more pressure to switch when tokenized deposits offer comparable payments and interest.
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