America’s largest banks are preparing a direct response to one of the fastest-growing crypto products: stablecoins.
JPMorgan Chase, Bank of America, Citigroup and other major lenders announced Friday that they plan to launch a shared tokenized deposit network through The Clearing House by the first half of 2027. The project would allow bank deposits to flow through blockchain infrastructure with around-the-clock settlement, giving traditional bank currency some of the same capabilities that have helped stablecoins gain traction.
The move highlights the growing competition to become the preferred form of cash on blockchain networks.
“As a result of the GENIUS Act, competition appears to be emerging between stablecoins, tokenized deposits, and tokenized money market funds to become the preferred on-chain treasury instrument,” said Reid Noch, vice president of U.S. equity market structure at TD Securities.
Stablecoins, particularly Circle’s USDC (CRCL) and Tether’s USDT, currently dominate this market. Dollar-pegged tokens are widely used for cryptocurrency trading, cross-border payments and, increasingly, savings products. But banks fear that if stablecoins become mainstream, deposits could migrate from traditional accounts to crypto wallets.
Tokenized deposits allow banks to bring their customers on-chain without losing control of their deposits. A customer’s bank deposit would be represented as a digital token that could move along the blockchain’s tracks. Unlike stablecoins, the funds would remain inside the banking system.
Noch said token deposits solve long-standing inefficiencies in global payments.
“Anyone who has ever transferred money, especially overseas, knows that the process can be expensive and often takes one or two business days,” Noch said. Using blockchain infrastructure, tokenized deposits could enable near-instantaneous transfers around the clock while reducing settlement costs and friction, he said.
The initiative also shows how far blockchain technology has spread into the financial mainstream.
“America’s largest banks are voluntarily going online,” said Digital Chamber CEO Cody Carbone. “When the nation’s largest institutions decide that the future of finance lies on blockchain, they prove exactly what our industry has been striving for forever.”
Significant competition
Yet the banking industry’s approach differs sharply from crypto’s vision of open networks.
Noelle Acheson, author of “Crypto is Macro Now,” noted that banks have spent years experimenting with private blockchain systems that move money internally while maintaining tight control over users and transactions. Clearing House’s planned network extends this model to multiple banks, but remains far removed from public blockchain ecosystems where stablecoins circulate freely.
Acheson argued that the project demonstrates that banks are taking stablecoins seriously despite public comments from some executives, including JPM CEO Jamie Dimon, who downplayed the threat. Although stablecoins offer greater liquidity and flexibility, she said many corporate clients might prefer a bank-backed system that fits within existing compliance frameworks.
In a report released in March, Jeffries said he estimated that stablecoins could lead to a 3% to 5% decrease in core deposits over the next five years and a decrease in average bank profits of around 3%.
The result could reshape the way money moves on blockchain networks.
If successful, the Clearing House initiative could become a significant competitor to stablecoins for corporate payments and treasury operations. At the same time, it highlights a broader trend: traditional finance is increasingly adopting blockchain technology, even as it competes with crypto-native alternatives built on the same infrastructure.
