Federally chartered crypto bank Anchorage Digital is deploying infrastructure that allows banks to issue tokenized deposits, joining financial institutions’ growing efforts to bring traditional bank money to blockchain networks.
The bank said on Monday that its new platform would help banks offer round-the-clock payment and settlement services using blockchain technology without replacing their existing core banking systems.
“A lot of banks we’re starting to work with are thinking about token deposits and how can we start doing that? [them]” said Nathan McCauley, CEO of Anchorage Digital, in an interview with CoinDesk.
The product works by creating a blockchain-based representation of customer deposits while retaining the underlying funds in the bank’s traditional deposit accounts. Anchorage will provide blockchain infrastructure, wallet management and smart contract technology, while banks will maintain customer relationships and custody of deposits.
The move comes as banks increasingly look for ways to offer faster payments and settlements in a financial system that still operates largely on business hours and batch processing.
