JPMorgan, Citi and Other Banks to Launch Tokenized Deposit System by 2027

Major financial institutions including JPMorgan and Citi are preparing to introduce a blockchain-based tokenized deposit system by 2027, positioning it as a competitive alternative to cryptocurrencies. The initiative follows the potential enactment of the CLARITY Act, signaling a strategic shift in traditional finance toward distributed ledger technology.

The Clearing House, a bank-owned payment network, will operate the system, enabling 24/7 movement of tokenized customer deposits across U.S. member banks. "This represents a big move for the banks," said Clearing House CEO David Watson, acknowledging the "radically different" future of on-chain finance. The project, internally referred to as "the bridge" or "the chain," has yet to select a blockchain partner.

Unlike stablecoins, tokenized deposits maintain existing credit risk profiles by representing actual bank deposits recorded on-chain rather than creating new digital assets. This approach preserves current regulatory and accounting frameworks while modernizing settlement infrastructure.

The banking consortium's move comes as crypto-native payment solutions gain traction, with institutions seeking to combine blockchain efficiency with traditional financial safeguards. The development underscores growing institutional recognition of distributed ledger technology's potential to transform payment rails.