JPMorgan, three US banks challenge stablecoins with shared deposit tokens

JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are developing a shared tokenized deposit network that could bring round-the-clock blockchain payments to the regulated US banking system.

Four US banks move tokenized deposits onto one network

The Clearing House, a payments company jointly owned by major commercial banks, will operate the planned network. It aims to let participating institutions clear and settle tokenized deposits at any time while connecting blockchain-based activity with existing payment rails.

Tokenized deposits represent claims against money held at a commercial bank. Unlike stablecoins, the underlying funds remain within the regulated banking system and receive the same legal treatment as conventional deposits.

The network will initially serve multinational corporations. Its proposed uses include programmable treasury operations, real-time liquidity management, automated payments and cross-border transfers.

“This is a big move for the banks,” The Clearing House CEO David Watson said while discussing the project.

The initiative has support from more than a dozen other institutions, including BNY, HSBC, PNC, Santander, TD Bank, Truist and U.S. Bank. A blockchain provider has not yet been selected, according to earlier reporting.

Shared deposit tokens create a bank-led stablecoin rival

JPMorgan and Citigroup already operate separate blockchain payment services, but the new project would allow tokenized money to move between different banks.

JPMorgan’s Kinexys platform processes more than $7 billion in average daily volume and has handled over $40 trillion since its launch. Citi Token Services operates in the United States, United Kingdom, Singapore and Hong Kong, where it has transferred billions of dollars through Citigroup’s network.

A shared system could remove the limits of these closed networks. JPMorgan Payments co-head Max Neukirchen said a regulated market-infrastructure solution for clearing and settling tokenized deposits was needed to scale institutional on-chain payments.

Stablecoins already provide 24-hour transfers, programmable settlement and access across blockchain networks. About $263 billion in stablecoins are in circulation, giving crypto-native payment providers an established market that banks must now address.

Deposit tokens would offer similar settlement functions while keeping customers’ money on bank balance sheets. However, the banks must agree on common technical and operating standards despite competing for many of the same corporate clients.

CLARITY Act dispute raises the stakes for US banks

The network is taking shape as US banking groups pressure the Senate to tighten stablecoin provisions in the CLARITY Act.

The American Bankers Association, Independent Community Bankers of America and 76 state banking associations have asked lawmakers to prevent crypto platforms from offering incentives that function like interest on deposits.

Current language would prohibit interest-like returns on stablecoins held passively but permit rewards tied to payments and other qualifying activity. Banking groups argue that crypto companies could use these incentives to draw money away from banks, reducing the deposits available for consumer and business lending.

Goldman Sachs has split from the wider banking lobby over whether that disagreement should delay the bill. CEO David Solomon supports advancing the CLARITY Act despite calling it imperfect, arguing that establishing a federal market structure would provide greater certainty for digital asset development.

His position contrasts with JPMorgan CEO Jamie Dimon and other banking executives who have warned that the reward provisions could place regulated banks at a competitive disadvantage. Goldman’s support for advancing the bill does not necessarily mean it endorses every stablecoin provision.

Tokenized deposit network targets first-half 2027 launch

The Clearing House plans to make the system available to US financial institutions beyond its initial participants, potentially allowing smaller banks to access shared blockchain payment infrastructure.

Development will now depend on selecting the underlying technology, agreeing on operating standards and connecting the network with existing bank systems. The target remains the first half of 2027, although the participating institutions have not announced a specific launch date.

Multinational companies will provide the first test of whether regulated deposit tokens can match the speed and programmability of stablecoins without moving funds outside the banking sector.