The infrastructure for tokenized bank deposits is beginning to take shape

July 31, 2026 • 10:55 am ET Hung Tran In a speech at the Atlantic Council earlier this week, Financial Stability Board Secretary General John Schindler argued that international coordination remains essential in finance because risks and innovation do not stop at national borders. Tokenized bank deposits are a case in point. Until now, these deposits have largely remained confined to proprietary bank networks, limiting their use across institutions and jurisdictions—especially compared with stablecoins, whose transaction volume reached $33 trillion in 2025. But that may be starting to change. Just this month, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) launched a blockchain-based shared ledger. With seventeen banks from six continents piloting live transactions, the move marks a major step toward enabling 24/7 cross-border payments with tokenized bank deposits. Meanwhile, Project Agora, led by the Bank for International Settlements and seven central banks, successfully tested a shared platform for tokenized commercial bank deposits and central bank money. Yesterday, the project announced that twenty-eight financial institutions and central banks across Asia, Europe, and North America have completed seventeen real-value transaction scenarios totaling approximately $1 million. Together, these initiatives suggest that the global infrastructure needed for 24/7 cross-border payments is starting to come together. Building the rails for tokenized deposits Tokenized bank deposits—digital representations of commercial bank deposits that can be used for transactions on distributed ledgers—have largely been transacted on issuing banks’ proprietary blockchains. They are now becoming part of increasingly connected cross-border platforms, with some regional variations in emphasis. In the US, the largest issuer of tokenized deposits, JPMorgan Chase, has processed more than $7 billion in transactions daily, with a cumulative transaction volume of more than $4 trillion to date, using its Kinexys (formerly Onyx) network. Meanwhile, the Bank of New York Mellon (BNY) is enabling tokenized deposits via its private, permissioned blockchain for on-chain bank-to-bank settlement. And the Texas Bankers Association, in cooperation with San Antonio-based Vantage Bank, has announced its Innovation Magnet Program to give member banks structured access to tokenized deposit technology. Still, the transaction volume of tokenized bank deposits remains very modest relative to stablecoins.As part of efforts to overcome fragmentation and support 24/7 settlement, the Clearing House recently launched an on-chain clearing and settlement system for tokenized deposits that nets transactions among a group of international banks. The system—still in its pilot phase—also links blockchain-based transactions directly to real-time gross settlement networks such as the Real-Time Payments network and the Clearing House Interbank Payment System, facilitating transfers between digital and traditional commercial bank money. This allows any residual imbalances after netting among participating banks to be cleared and settled in reserves at the Federal Reserve’s core ledger. When fully operational, this system—along with the numerous projects described below—could give a significant boost to the adoption of tokenized deposits worldwide. Beyond the US, tokenization experiments are multiplying Internationally, SWIFT has activated its blockchain-based orchestration layer, allowing seventeen participating banks, including DBS and HSBC, to move tokenized customer deposits across borders 24/7. In the European Union, discussion has focused on the European Central Bank (ECB) providing a trusted public anchor or wholesale bridge to allow cross-bank convertibility and interoperability between different platforms based on distributed ledger technology (DLT) and the TARGET payment system. In Hong Kong, Project Ensemble has provided a regulatory sandbox to test the use of wholesale central bank digital currencies (CBDCs) and tokenized deposits. Project Guardian in Singapore tests asset tokenization across fixed-income, foreign exchange, and asset management markets in a cross-border collaborative sandbox. Interestingly, China’s CBDC—e-CNY—is moving toward a tokenized deposit system that allows wallet balances to earn interest. Importantly, much progress has been made through Project Agora, led by the Bank for International Settlements in cooperation with seven major central banks and a group of private financial institutions. The initiative seeks to integrate tokenized bank deposits with tokenized central bank money on a unified public-private ledger and could demonstrate that tokenized commercial bank money is well suited to high-velocity, programmable international finance. The project completed cross-border real-value testing, a major step in the space. Rules are starting to catch up with technology With regard to regulation, the Federal Deposit Insurance Corporation recently clarified that it is technologically neutral about how deposit records are maintained—traditionally on bank books or using DLT, including blockchain—and therefore tokenized bank deposits are fully eligible for deposit insurance and can earn interest. More generally, tokenized deposits are being viewed as part of banks’ normal operations, subject to applicable regulatory and supervisory oversight. As a result, Fed Governor Michael Barr has said that tokenized deposits are more robust than stablecoins. Regulatory clarity has eased concerns among corporations and financial institutions about using tokenized deposits and securities. Meanwhile, there has been some progress in the legislative process surrounding the proposed Clarity Act, which could favor tokenized deposits by limiting the potential rewards available to holders. Specifically, stablecoin rewards would be restricted, with limited exceptions for activity-based rewards—linked to transactions, payments, and loyalty programs—not just passive holding. Tokenized deposits move from theory to practice So far, corporate treasurers have been active in using tokenized deposits to manage their liquidity across borders, benefiting from instant clearing and settlement while avoiding the need to rely on traditional SWIFT messaging and correspondent banks—significantly reducing transaction costs. In particular, delivery-versus-payment can become instantaneous when tokenized bank deposits are used to pay for tokenized assets. This has reduced the traditional counterparty settlement risk arising from lengthy settlement periods, such as T+1 or T+2. The programmability of tokenized deposits has allowed banks to manage complex payment-versus-performance relationships with various customers, such as in trade finance. Concretely, smart contracts can be embedded in financial flows, triggering payments when certain performance benchmarks are met by different participants in the transaction chain—reducing reliance on time-consuming paper-based documentation and telex and fax communications. A market poised for growth The combined effects of infrastructure developments, regulatory clarity, and growing wholesale usage are likely to drive rapid growth in tokenized bank deposits. Citigroup estimates that by 2030, the annual turnover volume of tokenized deposits could exceed $100 trillion, matching its projected volume for stablecoins. Fundamentally, the growth of tokenized deposits is integral to the development of tokenized real-world assets, which have reached between $30 billion and $36 billion in value. After all, tokenized deposits provide the payment rails needed to buy and sell these assets. They include $15 billion in US Treasury securities, $7.3 billion in commodities, $1.5 billion in stocks, and a growing volume of private credit and real estate. Citigroup forecasts that total tokenized assets will balloon to between $5.5 trillion and $8.2 trillion by 2030. It is important to note that tokenized deposits and stablecoins serve different purposes but are, to some extent, complementary. Tokenized deposits are geared toward wholesale activities, including cross-border treasury operations and transactions involving tokenized financial assets by financial institutions. By contrast, dollar-based stablecoins, while having legitimate uses by financial institutions, enjoy broader applications in remittances, where they offer a cost-effective alternative to traditional money transfers, and in emerging markets, where they can provide a hedge against unstable domestic monetary conditions. Stablecoins, especially those originating outside the US, also feature in illicit transactions, according to the Financial Action Task Force. Tokenized deposits, stablecoins, and wholesale CBDCs will one day coexist in our international financial ecosystem. Their adoption and impact will depend on whether commercial banks, central banks, regulators, and infrastructure providers can build interoperable systems that make cross-border payments faster and safer. The technology remains in its early stages, but the foundations are taking shape. Hung Tran is a nonresident senior fellow at the Atlantic Council’s GeoEconomics Center, a senior fellow at the Policy Center for the New South, a former executive managing director at the Institute of International Finance, and a former deputy director at the International Monetary Fund. At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future. Further reading Image: A symbolic illustration of 5G and global digital connectivity. Source: iStock.