Inside the Secret Plan of Leading US Banks to Revolutionize Deposits with Tokenization

The planned network aims to connect traditional banking rails with blockchain infrastructure for around-the-clock settlement capabilities.

The biggest banks on Wall Street are reportedly going to launch a tokenized deposit network in the first half of 2027.

The effort is being led by the Clearing House, a real-time payments company co-owned by major financial institutions including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo.

Project to Bridge Traditional Payments with Blockchain

The Wall Street Journal reports that the project, called “the bridge,” aims to connect traditional banking payment systems to blockchain infrastructure so that tokenized deposits can move instantly with 24/7 settlement. It also states that the underlying blockchain will be built through a partnership with a yet-to-be-selected third-party vendor.

“This is a big move for the banks,” said Clearing House Chief Executive David Watson, who said the industry is facing a “radically different” future when it comes to on-chain payments and finance.

Citi sees the initiative as an extension of the role banks already play in the financial system. The move was “another step that effectively cements” banks’ role in financing, money management, and capital markets, said Shahmir Khaliq, the firm’s head of services.

At the same time, banks have been wary about stablecoins, concerned that their use could divert deposits away from the firms. Financial institutions and crypto institutions have been at loggerheads for months over recently advanced legislation that would allow the latter’s customers to earn interest from their stablecoin holdings.

Demand For Adoption Remains Gradual

The report states that all US banks will have access to the tokenized deposit network, with possible use cases including real-time liquidity management, programmable treasury operations, and cross-border payments. The Clearing House also expects big multinationals to be among its first users.

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On the other hand, Mark Monaco, head of global payment solutions at Bank of America, said clients are not “beating down the door” for tokenized deposits yet. However, he also revealed that there is growing interest in the product, further admitting that adoption would take time.

JPMorgan has already dipped its toes with JPM Coin, an in-house tokenized deposit system for settling payments on its private blockchain. More recently, the firm also launched a token on Base for its institutional clients.

The latest development follows last year’s discussions among major financial institutions about creating a joint stablecoin through The Clearing House and Early Warning Services. As much as this is still being explored, WSJ said that some banking executives are still unsure about the benefits that these digital assets offer outside of cross-border payments.