Crypto for Advisors: What are tokenized deposits?
This article explains the technical and regulatory distinctions between tokenized bank deposits and stablecoins within the blockchain ecosystem. It highlights that while both utilize distributed ledger technology, tokenized deposits remain permissioned instruments tied to specific banking relationships, unlike the more liquid, bearer-like nature of stablecoins.
Why it matters
As banks increasingly adopt blockchain infrastructure, understanding the legal and structural differences between these digital assets is essential for financial advisors and institutional investors navigating the evolving fintech landscape.
In today’s newsletter, Laurie Rosini , partner at McDermott Will & Schulte, explains why banks are moving deposits on-chain via permissioned environments.
Then, in “Ask an Expert,” Morva Rohani breaks down the differences between stablecoins and tokenized deposits.
Tokenized deposits are going on-chain — but they won’t be permissionless
Blockchain may be reshaping the walled gardens of banking, but the walls are not coming down soon. Even on the same rails, deposits and stablecoins play by different rules: deposits remain more private, more permissioned and more anchored to traditional banking.
Banks are increasingly putting deposits on blockchain rails, but within permissioned environments. Citi and BNY are using private blockchain infrastructure, while JPMorgan has recently launched JPMD (JPMorgan Deposit Token), a permissioned deposit token on the public Base blockchain. Whatever the infrastructure, tokenized deposits remain permissioned because they are deposit liabilities of regulated banks.
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