Tokenized Deposits: What Are They And How Are They Different to Stablecoins? - Arkham
Infrastructure
Tokenized deposits represent a transformative shift in banking, where regulated institutions issue digital tokens representing existing deposit liabilities on distributed ledgers. Unlike stablecoins, which rely on reserve pools held by non-bank entities, tokenized deposits remain on the bank's balance sheet, maintaining standard regulatory protections and deposit insurance. This infrastructure allows for real-time, 24/7 settlement and the embedding of conditional logic, significantly improving treasury management for multinational corporations. Major institutions are actively deploying these solutions, with JPMorgan's Kinexys platform processing over $7 billion in daily volume and HSBC expanding its cross-border services across Hong Kong, Singapore, the UK, and Luxembourg. In November 2025, JPMorgan launched its JPMD token on the Base network, while BNY and Goldman Sachs have also advanced their own digital asset platforms. These developments highlight a transition from experimental blockchain use cases to core banking infrastructure that modernizes legacy payment rails. By keeping assets within the conventional banking framework, tokenized deposits offer a compliant path for institutional liquidity management that avoids the risks associated with bearer-asset stablecoins.
Key points
- ▸JPMorgan's Kinexys platform has processed over $3 trillion in total transaction volume since inception.
- ▸HSBC expanded its tokenized deposit service to U.S. corporate clients in April 2026.
- ▸Stablecoin market supply reached nearly $300 billion by mid-2026, contrasting with bank-issued deposit tokens.
- ▸JPMorgan launched its JPMD token on the Base Layer-2 network in November 2025.
Background
Tokenized deposits are digital representations of traditional bank deposits, functioning as a wrapper for existing money rather than a new asset class. They operate on permissioned ledgers where the issuing bank maintains the liability, ensuring the token remains part of the regulated banking system. This allows banks to leverage blockchain's programmability and speed while retaining the legal and insurance frameworks of standard accounts.
Relevance
9.5/10
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