#BankingInfrastructure
7 articles tagged #BankingInfrastructure — curated RWA tokenization coverage.
Tokenized deposits could affect bank liquidity, maturity transformation
The Federal Reserve Bank of Dallas explores the systemic implications of tokenized deposits, contrasting them with stablecoins by highlighting their integration within existing bank regulatory frameworks. While stablecoins often operate outside traditional banking structures, tokenized deposits offer interest-bearing alternatives that could fundamentally alter bank liquidity management. The analysis suggests that tokenization could reduce the 'stickiness' of deposits by enabling near-instantaneous transfers, potentially increasing deposit rate betas and shortening the weighted average life of liabilities. Such shifts threaten the banking sector's core function of maturity transformation, as banks currently rely on the long duration of deposits to fund long-term loans. The report estimates that a 10% reduction in deposit duration could shrink maturity transformation capacity by approximately $580 billion in 10-year equivalents. Furthermore, the increased volatility and outflow uncertainty associated with programmable, real-time tokenized deposits may necessitate higher holdings of high-quality liquid assets. Ultimately, the Dallas Fed highlights that while tokenized deposits could improve payment efficiency, they risk forcing banks to rely more on expensive term debt, potentially increasing the cost of credit for the broader economy.
JPMorgan, Citi Plan Tokenized Bank Network for 2027
A consortium of major U.S. banks, including JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo, is developing a shared tokenized deposit network targeting a launch by the first half of 2027. This initiative, internally referred to as "the bridge" or "the chain," aims to facilitate instant, 24/7 settlement of traditional deposits across different financial institutions. By leveraging the Clearing House infrastructure, the network seeks to eliminate the limitations of standard business hours for large multinational corporate clients. The project focuses on streamlining treasury operations, enhancing liquidity management, and improving the efficiency of cross-border payments. This development represents a significant shift toward blockchain-based settlement for traditional banking, following similar moves by institutions like BNY. Furthermore, the effort aligns with broader industry trends, such as the interoperability framework being developed between DBS and JPMorgan’s Kinexys. The move underscores the growing institutional commitment to integrating tokenized assets into core banking systems to modernize global payment rails.
Tokenized Deposits Explained: What Swift’s Multi
Swift has successfully completed a multi-bank pilot program testing the integration of tokenized deposits across diverse distributed ledger technology (DLT) networks and existing fiat payment systems. By leveraging its established messaging infrastructure, Swift demonstrated that tokenized assets can move seamlessly between different blockchains and traditional bank ledgers without requiring a single global network. This initiative involved major global financial institutions, including Citi, Deutsche Bank, and HSBC, to validate interoperability in a fragmented digital asset landscape. The pilot proves that banks can maintain their existing regulatory compliance and liquidity management frameworks while adopting blockchain-based settlement. This development is significant for the RWA market because it provides a scalable blueprint for institutional-grade settlement of tokenized assets. By bridging the gap between DLT and legacy systems, Swift reduces the friction that has historically hindered the adoption of tokenized deposits. Ultimately, this move signals a shift toward a hybrid financial ecosystem where tokenized value can coexist with traditional banking infrastructure.
SWIFT launches blockchain ledger with 17
SWIFT has officially launched a new blockchain-based ledger designed to facilitate cross-border payments using tokenized bank deposits. Seventeen major global financial institutions, including HSBC, Citi, BNP Paribas, UBS, ANZ, DBS, and Standard Chartered, are participating in the initial pilot phase. This development follows nine months of intensive internal development aimed at enabling 24/7 payment availability, including weekends and overnight transactions. By integrating tokenized deposits into its existing messaging infrastructure, SWIFT seeks to modernize cross-border settlements while maintaining rigorous compliance, credit, and risk management standards. This initiative represents a significant shift in how traditional banking networks adopt distributed ledger technology to enhance the velocity of global commerce. The move aligns with a broader industry trend toward tokenized financial assets, positioning SWIFT as a central player in the evolution of programmable money. Ultimately, this pilot demonstrates that major financial incumbents are prioritizing the integration of blockchain rails to meet the demands of modern, always-on global markets.
Tokenized deposits ramp up in US as Cari grows to 30 banks ahead of pilot
The Cari Network, a platform for tokenized deposits, has expanded its reach to over 30 participating banks as it prepares for an upcoming pilot program. SouthState has joined as the sixth design partner bank, alongside major institutions including Huntington, First Horizon, M&T Bank, KeyBank, and Old National Bank. These design partners, combined with the broader network and pipeline of 40 additional banks, represent financial institutions holding over $10 trillion in total assets. The network aims to facilitate real-time settlement, improved liquidity management, and efficient digital money movement for its members. To accelerate its development, Cari is utilizing proven tokenized deposit technology developed by Tassat, which previously powered large-scale solutions like Signature Bank’s Signet. Furthermore, Cari has secured a strategic partnership by joining the American Bankers Association’s Premier Partner Network. This rapid expansion underscores a significant shift toward institutional adoption of blockchain-based deposit systems within the U.S. banking sector. The initiative highlights the industry's move toward finding scalable, compliant paths for digital asset integration in traditional finance.
Banks Back Tokenized Deposits To Compete in Digital Cash Race
Major financial institutions including Citi, BNY, JPMorgan's Kinexys, and Standard Chartered are accelerating the development of tokenized deposits to maintain their dominance in the evolving digital payments landscape. These digital representations of bank deposits operate on blockchain infrastructure while remaining direct liabilities of the issuing bank, ensuring compliance with existing deposit insurance and capital requirement regulations. This shift represents a strategic response to the rising competition from stablecoins and the development of central bank digital currencies like the digital euro. A notable milestone occurred in January when Lloyds Banking Group and Archax executed the U.K.'s first public blockchain transaction using tokenized deposits on the Canton Network. The European Central Bank is simultaneously advancing its digital euro project, targeting a 12-month pilot phase for the second half of 2027. By integrating these assets into distributed ledger technology, traditional lenders aim to secure their role in future treasury and payment systems. This trend highlights a broader institutional pivot toward tokenization as a means to modernize banking infrastructure while adhering to established regulatory frameworks.
Anchorage aims to bring banks onchain with new tokenized deposit platform
Federally chartered crypto bank Anchorage Digital has launched a new infrastructure platform designed to enable traditional banks to issue tokenized deposits on blockchain networks. This initiative allows financial institutions to facilitate 24/7 payments and settlement services without the need to replace their existing core banking systems. By creating blockchain-based representations of customer deposits while keeping the underlying funds in traditional accounts, Anchorage aims to bridge the gap between legacy finance and digital assets. This development arrives as major institutions like JPMorgan, Citi, and Bank of America prepare to launch their own shared tokenized deposit network by early 2027. The move highlights a broader industry shift toward tokenized deposits as a regulated alternative to private stablecoins like USDC or USDT. By providing the necessary wallet management and smart contract technology, Anchorage positions itself as a critical infrastructure provider for banks seeking to modernize payment rails. This strategy minimizes operational risks associated with full-scale system migrations, marking a significant step in the institutional adoption of onchain finance.