// GLOSSARY -- PAYMENTS & FINTECH

What is Tokenized Deposit?

1 min read Updated

A tokenized deposit is a bank deposit represented as a digital token on a blockchain — maintaining the regulatory protections of traditional banking while enabling programmable, composable, and instantly transferable deposits.

WHY IT MATTERS

Tokenized deposits are the banking industry's response to stablecoins. Instead of a private company (Circle, Tether) issuing dollar tokens, banks issue tokens representing actual bank deposits — with FDIC insurance, banking regulation, and the bank's balance sheet backing.

The advantage: combining the regulatory certainty of banking with the programmability of blockchain. Tokenized deposits can be used in smart contracts, settled instantly, and composed with DeFi protocols — all while maintaining bank deposit status.

JPMorgan's JPM Coin, Societe Generale's EURCV, and various pilot programs demonstrate institutional interest. This approach may eventually compete with or complement private stablecoins.

FREQUENTLY ASKED QUESTIONS

Tokenized deposits vs stablecoins?
Tokenized deposits: bank-issued, regulated, FDIC-insured (in US), backed by the bank's balance sheet. Stablecoins: privately-issued, backed by reserves, not deposit-insured. Different trust and regulatory models.
Are tokenized deposits available to retail?
Currently mostly institutional (interbank settlement, corporate treasury). Retail access is expected to follow as regulatory frameworks and technology mature.
Which banks are doing this?
JPMorgan (JPM Coin/Onyx), Goldman Sachs (GS DAP), Societe Generale (EURCV), and many others in pilot stages. Central bank CBDC initiatives also explore similar concepts.

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