How 21 Banks Changed the Conversation Around Stablecoins and Tokenized Deposits

Stablecoins and tokenized deposits can look deceptively similar from the perspective of a corporate user. Both can represent dollars digitally. Both can potentially settle around the clock. Both can support programmable transactions and operate across blockchain-based infrastructure.

But economically, they are different products. And banks are starting to figure that out.

JPMorgan, for example, is reportedly exploring its own stablecoin initiative alongside its existing and considerable tokenized-deposit infrastructure. And on Tuesday (Sept. 1), 21 financial institutions spanning North America, Europe, Asia, the Middle East and Africa announced plans to establish a new company dedicated to issuing stablecoins. The group includes Bank of America, Citi, Goldman Sachs, Wells Fargo, Deutsche Bank, UBS, Santander, MUFG Bank and others, and intends to launch a U.S. dollar-denominated stablecoin in the first half of 2027 before potentially expanding into additional G7 currencies, with the euro a priority.

The announced banking consortium is planning an operating company, global distribution and products spanning wholesale, institutional and retail markets, including cross-border payments and digital-asset settlement. After all, a stablecoin becomes considerably more useful when counterparties across jurisdictions, institutions and blockchain networks are willing to accept it. A consortium of global banks can potentially manufacture that acceptance much faster than any one institution could alone.

Read also: BankChain Puts Community Banks in the Digital Money Race

Banks Decide One Form of Digital Money Isn’t Enough

Banks are not abandoning tokenized deposits in favor of stablecoins. They are increasingly building both. That turns what has often been framed as a contest between competing versions of digital money into something more consequential: an effort by banks to assemble a portfolio of programmable money and eventually route transactions toward whichever form has the right combination of liquidity, portability, regulation and reach.

A tokenized deposit remains a commercial bank liability. It gives traditional deposit money blockchain-like programmability while preserving the banking relationship around deposits, liquidity and balance-sheet funding. A stablecoin is designed to travel more freely. A properly structured reserve-backed token can move between wallets, platforms and public blockchain networks without requiring every participant to maintain a direct account relationship with the issuing bank.

JPMorgan, which has spent years developing tokenized commercial-bank money through JPM Coin and related blockchain infrastructure, is reportedly evaluating whether it could eventually need a stablecoin as well. Meanwhile, community banks participating in the newly created BankChain Alliance are designing shared infrastructure that explicitly supports both tokenized deposits and bank-issued stablecoins.

Now 21 major financial institutions are preparing to establish a separate company specifically to issue stablecoins. The pattern suggests banks have begun treating these instruments less as substitutes than as different tools. And public blockchain availability addresses a limitation inherent in tokenized deposits: the money does not necessarily have to remain inside a single bank’s proprietary environment.

Still, the June installment of PYMNTS Intelligence’s Credit Union Tracker Series, “The Wallet Effect: How Credit Unions Can Close the Digital Currency Access Gap,” a collaboration with Velera, revealed that stablecoin awareness falls short for 70% of credit union members.

Read also: Nobody Told the ERP That Blockchain Won

Stablecoins Become a Financial Services Distribution Strategy

The irony is that banks may ultimately use stablecoins precisely because they are less bank-like than deposits. But that does not mean tokenized deposits are losing the argument. Tokenized deposits can protect the economics of banking. Stablecoins can extend the distribution of bank-linked money beyond conventional bank boundaries.

Consider a corporate treasury department making hundreds of payments across multiple countries.

A domestic payment between two corporate customers of connected banks might be most efficiently settled through tokenized deposits. A cross-border transaction involving counterparties operating on public blockchain infrastructure might favor a stablecoin. Another payment could remain on conventional instant-payment or card rails. The choice could ultimately depend on liquidity requirements, settlement timing, foreign-exchange costs, regulatory rules, counterparty preferences and the destination of the funds.

The BankChain Alliance offers an early indication of that model. Its planned network, targeted for 2027, is designed to accommodate tokenized deposits, stablecoins, smart payments and automated settlement rather than forcing participating community banks onto a single digital-money format.

The 21-institution stablecoin company adds another piece of infrastructure to that emerging stack.

All that being said, at the end of the day, building shared infrastructure is easier to announce than to govern. A consortium representing dozens of institutions creates purchasing power. It also creates coordination costs. That same issue was flagged here in an earlier PYMNTS analysis of the OpenUSD consortium, where it was noted that, “Governance is the real competitive test. Success will depend less on blockchain infrastructure than on who makes decisions when members commercial interests inevitably diverge.”

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