Tokenized deposits

Market state

This class is measured in flow, not stock. No bank or tracker publishes an aggregate outstanding balance of tokenised deposits, so headline comparisons with stablecoin market capitalisation are not like-for-like: the available figures are transaction volumes.

J.P. Morgan's Kinexys is the reference point. The bank reported more than $3trn in cumulative transactions since inception and average daily volume above $5bn as of late April 2026; by 29 June 2026 those figures had reached $4trn cumulative and average daily volume above $7bn, alongside expansion to eight currencies with the addition of the Australian dollar, Hong Kong dollar, Japanese yen, renminbi and Singapore dollar to the existing US dollar, euro and sterling.

J.P. Morgan's deposit token JPMD launched for institutional clients on Base on 12 November 2025, following a June 2025 proof of concept, with test transactions by B2C2, Coinbase and Mastercard. Its associated onchain money-market fund, JLTXX, stood at $811m on Ethereum on 25 July 2026.

HSBC operates a tokenised deposit service in Hong Kong, Luxembourg, Singapore, the United Kingdom and the United States, supporting euro, sterling, Hong Kong dollar, Singapore dollar and US dollar transfers on a private blockchain around the clock.

Two network initiatives will determine the class's scale. Swift announced a distributed-ledger platform for 24/7 tokenised deposit payments on 13 July 2026 with 17 banks - ANZ, BNP Paribas, BNY, Citi, DBS, First Abu Dhabi Bank, FirstRand, HSBC, Itau Unibanco, Lloyds, Mashreq, MUFG, OCBC, Standard Chartered, UBS, UOB and Wells Fargo - set to pilot live transactions, with reporting putting current tokenised deposit volumes across participating global systemically important banks at several billion dollars a day. Separately, JPMorgan Chase, Citigroup, Bank of America and Wells Fargo, with more than a dozen other US banks, plan a shared tokenised deposit network operated by The Clearing House and connected to its RTP and CHIPS systems, which together clear and settle over $2trn a day; the target launch is the first half of 2027 and no blockchain vendor had been selected.

Market structure

Most tokenised deposit activity runs on permissioned networks operated by a single bank for its own clients. The bank debits a conventional deposit, mints a token against it, and the token moves between the wallets of onboarded corporate and institutional counterparties, redeemable one-for-one into the same deposit. Because both legs sit on one balance sheet, settlement finality is a bookkeeping matter rather than an interbank one.

The practical uses are narrow and specific: cross-border and out-of-hours corporate treasury movements, programmable payments triggered by conditions, on-chain foreign exchange, and cash legs for tokenised securities settlement. J.P. Morgan's disclosed 2026 activity spans programmable payments with BMW Group, FirstRand Bank and Mitsubishi Corporation and on-chain foreign exchange with B2C2 and Siemens.

The frontier is interoperability. A single-bank token cannot settle a payment to a client of another bank without a shared network, which is why the Swift platform and The Clearing House initiative matter more than any individual product. JPMD's deployment on Base is the exception: a bank deposit token on a public network, restricted to institutional clients but transferable between EVM-compatible wallets and composable with smart contracts.

Deposit tokens and tokenised money-market funds are increasingly paired - JPMD for the cash leg, JLTXX for the yield-bearing leg - which is the bank sector's answer to yield-bearing stablecoins.

Risks

The dominant risk is that these systems remain islands. Value locked to one bank's network has no secondary market and no path to a counterparty outside it; the announced shared networks do not launch until 2027 at the earliest and, in the US case, had not selected a vendor as of July 2026.

Measurement is weak. Cumulative and daily transaction volumes are self-reported by the operating bank and are not independently verified, and no outstanding-balance series exists, so the size of the class cannot be compared with stablecoins or tokenised funds on a consistent basis.

Operational and concentration risk sits with the operator. A single bank runs the ledger, the wallets and the redemption commitment; continuous availability is a service promise rather than a market structure.

Deposit tokens also inherit bank credit risk above insured limits, and 24/7 transferability of deposit claims raises unresolved questions about intraday liquidity management and how a deposit run would propagate on a ledger that never closes.

Finally, the class is in direct competition with stablecoins for the same corporate cash. If tokenised deposits win on regulatory treatment, they lose on openness; the outcome depends on whether shared bank networks reach the reach and composability that public-chain stablecoins already have.

Regulatory treatment

Tokenised deposits sit inside the existing banking perimeter. They are deposits for regulatory purposes, carry the same deposit-insurance eligibility as conventional deposits, and require no new licence in the United States - the principal reason banks have favoured them over issuing stablecoins.

The GENIUS Act, effective 18 July 2025, defines and regulates payment stablecoins and does not convert bank deposit tokens into payment stablecoins, preserving that distinction. Reporting on the US shared network put non-bank stablecoin circulating supply at approximately $263bn when contrasting the two structures.

In Hong Kong, the Monetary Authority moved Project Ensemble into a new phase on 13 November 2025 to support real-value transactions in tokenised deposits and digital assets, making it the most advanced official-sector framework for interbank tokenised deposit settlement. Singapore's Project Guardian covers adjacent tokenised settlement workstreams, and HSBC operates its tokenised deposit service across both jurisdictions.

The United Kingdom accommodates tokenised deposits within existing deposit-taking authorisation, with the Digital Securities Sandbox covering the securities leg rather than the cash leg.

The open policy question is access: whether shared networks operated by bank-owned infrastructure such as The Clearing House will admit non-bank participants, and on what terms tokenised deposits and payment stablecoins will interoperate.