Tokenized deposits are ordinary bank deposits recorded as tokens on a blockchain or other distributed ledger. The money stays a liability on the issuing bank’s balance sheet, and U.S. law treats it as a deposit, not a payment stablecoin. JPMorgan, Citi and HSBC now run live programs for corporate and institutional clients, mainly for 24/7 treasury transfers and cross-border liquidity.
What a tokenized deposit is
A deposit is a bank’s promise to pay you money on demand or at a set date. Tokenizing it changes how the bank records that promise, not what the promise is. Instead of only a row in the bank’s core ledger, the balance also exists as a token on a shared ledger that can move between approved wallets.
A Federal Reserve staff note published September 4, 2026 defines tokenized deposits as “a digital representation of traditional DIs’ deposits recorded and transferred on a blockchain” (DI means depository institution). The note says they remain on the bank’s balance sheet, are legally still bank deposits and are eligible for deposit insurance. The authors state it reflects their own views, not Fed policy.
J.P. Morgan’s product page uses the same framing. It calls JPM Coin “a bank-issued deposit token—not a cryptocurrency or a stablecoin” and says the token is backed by USD deposits held in J.P. Morgan bank accounts.
Two design choices matter in practice:
- Ledger. Citi uses a private, permissioned blockchain it runs itself, and HSBC uses its in-house ledger. J.P. Morgan issues JPM Coin on Base, a public Ethereum Layer 2 network, but only vetted counterparties can transact.
- Client experience. Some programs expose tokens and wallets to the client. Others hide the token. Citi says clients of Citi Token Services need no wallet and do not hold tokens. They start payments from their existing account.
Tokenized deposits vs payment stablecoins
Both move dollars on programmable ledgers. The legal claim behind them is different. The table uses the GENIUS Act (Public Law 119-27, enacted July 18, 2025), the Fed note above and a BIS speech from August 28, 2026.
| Feature | Tokenized deposit | Payment stablecoin (GENIUS Act) |
|---|---|---|
| Issuer | A bank, as part of its deposit business | A permitted payment stablecoin issuer: a subsidiary of an insured bank, an OCC-approved federal qualified issuer, or a state qualified issuer |
| What backs it | The bank’s assets, liquid and illiquid (Fed note) | Identifiable reserves at least 1 to 1: cash, Fed balances, demand deposits, Treasuries maturing in 93 days or less, certain repos and government money market funds |
| Balance sheet | Stays on the bank’s balance sheet | Issuer holds identifiable reserves; activities limited to issuing, redeeming, managing reserves and custody |
| Deposit insurance | Eligible, like other deposits (Fed note) | “Shall not be … subject to deposit insurance” (Sec. 4(e)) |
| Interest | Can pay interest; J.P. Morgan cited “the ability to pay interest to holders” in June 2025 | Issuer may not pay “any form of interest or yield” solely for holding the coin (Sec. 4(a)(11)) |
| Typical network | Permissioned platforms (BIS) | Mostly public, permissionless blockchains as bearer-like instruments (BIS) |
The GENIUS Act draws the line directly. Its definition of payment stablecoin “does not include a digital asset that … is a deposit … including a deposit recorded using distributed ledger technology.” A bank token that meets the legal definition of a deposit sits outside the stablecoin regime. For the stablecoin side of that regime, see federal reserve genius act stablecoin rules.
What U.S. regulators have said
On April 7, 2026, the FDIC Board approved a proposed rule to implement parts of the GENIUS Act. It would amend the deposit insurance rules so that a bank’s “choice of technology or recordkeeping” does not affect coverage. The staff memo says tokenized deposits “are not a separate category of deposits under the statute.” A token still has to meet the legal definition of a deposit to count as one.
The same proposal says deposits held as reserves for a payment stablecoin would be insured to the issuer as a corporate depositor, not passed through to coin holders. The comment period closed June 9, 2026. The FDIC pages cited here describe it as a proposed rule.
The Federal Register notice also gives the GENIUS Act’s effective date: January 18, 2027, or 120 days after regulators issue final implementing rules, if that comes first.
Live and announced bank programs
Each row uses only the bank’s or regulator’s own pages.
| Bank or body | Product | Ledger | Clients and use | Status and date |
|---|---|---|---|---|
| J.P. Morgan (Kinexys) | JPM Coin (ticker JPMD), USD deposit token | Base, Ethereum Layer 2; plan for native issuance on Canton Network | Institutional clients; B2C2, Coinbase and Mastercard completed proof-of-concept transactions. Uses listed: cross-border payments, intraday liquidity, on-chain collateral | Proof of concept June 2025; available to institutional clients November 12, 2025; Canton plan announced January 7, 2026, phased through 2026 |
| Citi | Citi Token Services for Cash | Private permissioned blockchain owned and run by Citi | Corporate and financial institution clients; 24/7 liquidity transfers and payments between Citi branches; access via CitiDirect or API | Pilot moved to live commercial service October 10, 2024; live in the U.S., Ireland, Hong Kong, Singapore, UK, Japan and UAE as of September 28, 2026 |
| Citi | Citi Token Services with 24/7 USD Clearing | Same, linked to Citi’s USD clearing | Institutional clients in the UK and US; payments to Citi and non-Citi accounts | Announced September 29, 2025 |
| HSBC | Tokenised Deposit Service (TDS) | HSBC’s in-house distributed ledger | Corporate and institutional clients; Ant International was first client; transfers from treasury centers to subsidiaries | Hong Kong live May 22, 2025; Singapore October 9, 2025; also UK and Luxembourg; U.S. April 13, 2026; UAE June 22, 2026 |
| BIS with seven central banks (eight on the current project page) | Project Agorá | Shared programmable platform with tokenized reserves and tokenized deposits | Wholesale cross-border payments; more than 40 regulated financial institutions | Announced April 3, 2024; project report May 27, 2026 |
HSBC’s Hong Kong launch was the first live pilot under the Hong Kong Monetary Authority’s Supervisory Incubator for Distributed Ledger Technology, a supervisory arrangement for banks testing DLT. The service now supports EUR, GBP, HKD, SGD, USD and, since June 2026, the UAE dirham.
Project Agorá and the multi-bank problem
Most live programs work inside one bank. A JPM Coin moves between J.P. Morgan clients. A Citi token moves across Citi branches. Paying a client of another bank still needs a bridge, such as Citi’s link to its 24/7 USD Clearing service.
Project Agorá tests a shared answer. Central banks issue tokenized reserves, and commercial banks issue tokenized deposits, on one platform. The BIS May 2026 report says the prototype enables “atomic, multi-currency settlement,” meaning all legs of a payment settle together or not at all.
In real-value testing in July 2026, the BIS reports that 28 institutions and central banks completed transactions totaling about CHF 800,000 across 17 scenarios. Average time from initiation to settlement was about 80 seconds, without integration into existing settlement and core banking systems.
The BIS is clear about the gap. In his August 28, 2026 speech, General Manager Pablo Hernández de Cos said: “At present, there are no multi-bank or inter-jurisdictional ecosystems issuing tokenised deposits in an interoperable framework.”
What it means for fintechs and platforms
For product and treasury teams, the programs change three things.
Settlement hours. Citi says clients in its covered markets can move funds “without constraints of cut off times and holiday calendars.” HSBC describes 24/7 domestic and cross-border transfers. If your platform funds marketplace payouts or card programs over a weekend, this changes how much cash you pre-position on Friday.
Treasury and pre-funding. J.P. Morgan’s page pitches JPM Coin to payment service providers as a way to “lower pre-funding costs” and rely less on correspondent banking chains. HSBC and Citi frame their products around moving liquidity between a treasury center and subsidiaries.
Cross-border. Today the fastest cross-border moves happen between accounts at the same bank. A platform with entities in Hong Kong, Singapore and the U.S. can move USD between its own HSBC accounts on-chain. Paying a third party at another bank depends on that bank’s bridge.
Practical limits to plan for:
- Access is by client relationship. All three banks offer these services to their own corporate and institutional clients. HSBC notes approvals, documentation and onboarding requirements. A fintech that banks through a sponsor bank would need that bank to offer tokenized deposits, or a direct relationship with an issuing bank. See how to choose a sponsor bank.
- Integration differs. Citi uses existing channels (CitiDirect and API). J.P. Morgan uses its Blockchain Deposit Account framework plus EVM-compatible wallets. HSBC says TDS integrates with existing treasury systems.
- Pricing, limits and API specifications for these programs are not published on the pages cited here.
If you are comparing this with a stablecoin route, the stablecoin infrastructure guide covers the issuer and wallet side.
