The largest US banks have moved to a shared tokenized deposit network as stablecoin companies move deeper into payments and corporate financing.
The Wall Street Journal reported that the Clearing House will manage the system, a real-time payments network owned by JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and other major commercial banks. The network is expected to launch in the first half of 2027 and will be available to banks in the United States.
Banks are preparing a blockchain payment network
The planned system will connect existing bank payment rails to the blockchain infrastructure used in digital assets. According to the Journal, tokenized deposits on the network could be moved instantly and settled 24 hours a day, giving banks a way to offer blockchain-based payments without pushing deposits outside the regulated banking system.
Clearing House CEO David Watson told the Journal that the project is “a big step for banks,” adding that the industry faces a “radically different” future in on-chain payments and finance.
According to the report, the banks have not selected the blockchain supplier for the network. Some participating banks call the project ‘the bridge’, while others call it ‘the chain’.
Tokenized deposits are gaining ground in the stablecoin clash
The plan comes as banks see crypto companies competing more directly in the payments space. The Journal reported that major banks have grown concerned that stablecoins could siphon off deposits from lenders as crypto companies win more business from consumers and businesses.
Banks and crypto companies have also clashed over stablecoin legislation recently passed in Washington. According to the Journal, banks remain unhappy that the rules leave room for interest-like structures on stablecoins, while crypto companies have described the proposal as a compromise.
Banks prefer tokenized deposits because they represent regular bank deposits on a blockchain. The Journal reported that this structure maintains the same credit risk profile, regulatory treatment and accounting approach as traditional deposits, making it easier for banks to adopt digital payment systems under existing rules.
The demand for corporate bonds comes first
According to the Journal, the Clearing House expects large multinational companies to be among the network’s first users. Possible applications include programmable treasury transactions, real-time liquidity management and cross-border payments.
Shahmir Khaliq, Citi’s chief services officer, told the Journal that the network is a new step that strengthens banks’ role in financing, money management and capital markets.
At Bank of America, Mark Monaco, head of Global Payment Solutions, said customers won’t be “knocking on doors” for tokenized deposits. Still, he told the Journal that there is some interest and that the network would help banks stay ready as adoption evolves.
According to the Journal, JPMorgan has already used JPM Coin for internal institutional payments on its private blockchain. The bank has also launched a deposit token called JPM Coin on Base, a public blockchain linked to Coinbase Global, access to which is limited to institutional clients. Last year, major banks explored a joint stablecoin effort through the Clearing House and Early Warning Services, which operates Zelle, the Journal previously reported.