America’s largest banks are building a new digital currency network to stop a massive deposit drain America’s biggest banks are launching tokenized deposits to compete with stablecoins, opening a new front in the race to become the dominant form of cash on blockchain networks.
What to know: – JPMorgan Chase, Bank of America, Citigroup and other major lenders plan to launch a shared tokenized deposit network through The Clearing House by the first half of 2027, enabling round-the-clock blockchain-based settlement of bank deposits. – The initiative is designed to counter the rise of stablecoins such as USDC and USDT by keeping customer funds within the regulated banking system while offering similar speed and efficiency for payments and transfers. – Analysts say the move underscores both banks’ growing concern that stablecoins could erode core deposits and the broader trend of traditional finance adopting blockchain technology, even as it maintains tighter control than public crypto networks
America’s largest banks are preparing a direct response to one of crypto’s fastest-growing products: stablecoins. JPMorgan Chase, Bank of America, Citigroup and other major lenders said Friday that they plan to launch a shared tokenized deposit network through The Clearing House by the first half of 2027. The project would allow bank deposits to move across blockchain infrastructure with round-the-clock settlement, giving traditional bank money some of the same capabilities that have helped stablecoins gain traction.
The move highlights the growing competition to become the preferred form of cash on blockchain networks. “Following the GENIUS Act, a competition seems to be emerging between stablecoins, tokenized deposits and tokenized money market funds to become the preferred onchain cash instrument,” said Reid Noch, vice president of U.S. equity market structure at TD Securities. Stablecoins, specifically Circle’s (CRCL) USDC and Tether’s USDT, currently dominate that market….