Top U.S. banks JPMorgan Chase (NYSE: $JPM), Bank of America (NYSE: $BAC), and Citigroup (NYSE: $C) are joining forces on a new tokenization network.
The biggest American banks plan to build a shared tokenized deposit network by the first half of 2027 to protect their deposits from the threat posed from stablecoins
The system will be operated by The Clearing House, the payments company collectively owned by the banks. Internally, the banks are calling the tokenized network “the bridge.” More From Cryptoprowl: Tokenized deposits are blockchain representations of customers’ money held at major U.S. banks. The new system will convert deposits into digital tokens that can be transferred quickly on a blockchain.
The move comes as JPMorgan, Bank of America, and Citigroup grow increasingly worried about stablecoins competing against them for customer deposits. The banks have lobbied heavily in Washington, D.C. over the past year to try and prevent stablecoins from offering yield on deposits similar to the interest provided on bank accounts. Stablecoins are cryptocurrencies whose value is pegged to another asset, typically the U.S. dollar.