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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.
Jun 6, 2026, 3:59 p.m. 3 min read
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.
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. The dollar-pegged tokens are widely used for crypto trading, cross-border payments and increasingly for savings products. But banks are concerned that if stablecoins become mainstream, deposits could migrate from traditional accounts into crypto wallets.
