JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are working with The Clearing House on a shared tokenised deposit network designed to deliver 24/7 blockchain-based payments inside the regulated US banking system, directly challenging the role of stablecoins in institutional finance.
The Clearing House, which is jointly owned by major commercial banks, will run the system and aims to let participating institutions clear and settle tokenised deposits at any time of day while linking blockchain activity to existing payment infrastructure.
Unlike stablecoins, which are generally issued by crypto firms and often sit outside traditional banking rails, tokenised deposits are digital representations of money already held at commercial banks and are treated in law in the same way as conventional deposits.
The banks plan to use the new network initially for large multinational corporations, targeting uses such as programmable treasury functions, real-time liquidity management, automated payments and cross-border transfers.
“This is a big move for the banks,” said The Clearing House chief executive David Watson as he outlined the project.
Major institutions back network
More than a dozen other institutions are backing the initiative, including BNY, HSBC, PNC, Santander, TD Bank, Truist and U.S. Bank. A blockchain technology provider has not yet been chosen.
JPMorgan and Citigroup already run separate blockchain payment platforms, but both are effectively closed systems. The proposed network would, for the first time, allow tokenised commercial-bank money to move between different participating banks.
JPMorgan’s Kinexys platform processes over $7bn in average daily volume and has handled more than $40tn in transactions since launch. Citi Token Services, Citigroup’s platform, operates in the United States, United Kingdom, Singapore and Hong Kong, having processed billions of dollars through the bank’s global network.
A shared infrastructure is seen by the participants as a way to remove the limits of these single-bank systems. Max Neukirchen, co-head of JPMorgan Payments, has argued that a regulated market-infrastructure solution for clearing and settling tokenised deposits is required if institutional on-chain payments are to scale.
Stablecoin rivalry and regulatory backdrop
Stablecoins already provide around-the-clock transfers, programmable settlement and interoperability across multiple blockchain networks. There are about $263bn in stablecoins in circulation, giving crypto-native payment providers a significant head start that traditional banks are now seeking to address.
Deposit tokens would offer many of the same settlement capabilities while keeping customer funds on banks’ balance sheets. However, the success of the new network will depend on the banks setting common technical and operational standards despite competing for many of the same corporate clients.
The project is emerging as US banking trade bodies lobby the Senate to tighten stablecoin provisions in the CLARITY Act.
The American Bankers Association, Independent Community Bankers of America and 76 state banking associations have urged lawmakers to stop crypto platforms offering incentives that effectively resemble interest on deposits.
Under the bill’s current language, interest-style returns on stablecoins held passively would be banned, but rewards connected to payments and other qualifying activity would be allowed. Banking groups argue that such incentives could entice customer funds away from regulated banks, shrinking the pool of deposits available to support consumer and business lending.
Wall Street split over CLARITY Act
Goldman Sachs has broken with much of the wider banking lobby over whether disagreements on these reward provisions should delay the legislation.
Chief executive David Solomon backs moving the CLARITY Act forward despite describing it as imperfect, saying that a federal market structure for digital assets would offer greater certainty for future development.
His stance contrasts with JPMorgan CEO Jamie Dimon and several other banking leaders, who have warned that the bill’s reward framework could leave regulated banks at a competitive disadvantage compared with crypto firms. Goldman’s support for advancing the legislation does not mean it agrees with every stablecoin-related clause.
Timeline and next steps
The Clearing House intends to open the planned tokenised deposit system to US financial institutions beyond the initial group, which could allow smaller banks to plug into shared blockchain payment infrastructure.
Further development will hinge on selecting the core blockchain technology, finalising operating and technical standards, and integrating the network with existing bank systems. The target is the first half of 2027, although the institutions involved have not committed to a specific launch date.
Multinational corporations will be the first major test of whether regulated deposit tokens can match the speed and programmability offered by stablecoins while keeping funds entirely within the traditional banking sector.
