Tokenized deposits are gradually moving from the research stage into real-world implementation. They aren’t a mass-market retail product yet, as most development remains concentrated in the institutional segment, where settlement speed, liquidity management, operational risk reduction, and compatibility with tokenized assets are key priorities.
Major banks and public institutions increasingly view tokenized deposits as a new settlement layer for the existing financial system. In practice, current initiatives are focused on 5 key areas:
- Cross-border payments
- Corporate treasury management
- Settlement of tokenized assets
- Interbank settlements
- Programmable payments
For a closer look at what tokenized deposits are, how they work, and how they differ from other forms of digital money, see CP Media’s dedicated explainer.
The Current State of the Market: From Research to Limited Adoption
The tokenized deposit market remains at an early stage of development and is characterized by a high degree of fragmentation. Some projects are still in the research and controlled testing phase, others are operating as pilot programs, while a limited number of organizations have already begun commercial deployment for corporate and institutional clients.
In practice, tokenized deposit adoption can be divided into 3 stages:
- Research initiatives: evaluating the legal, technological, and operational framework.
- Controlled testing: conducting transactions in a restricted environment involving banks, regulators, and financial market infrastructure providers.
- Commercial deployment: using tokenized deposits in real corporate or interbank transactions, although adoption remains limited.
The most significant shift in recent years is that market participants moved beyond debating whether tokenized deposits can be issued and began assessing the tangible economic benefits of their adoption. A notable example came from Visa, which announced in June 2026 that it was developing tokenized deposit infrastructure that would enable banks to issue programmable digital assets backed by traditional bank deposits.
Cross-Border Payments and International Liquidity Management
Cross-border payments remain one of the most obvious use cases for tokenized deposits. Under the traditional model, these transactions typically depend on chains of correspondent banks, time zone differences, business hours, internal compliance procedures, and sequential data reconciliation.
For banks and corporate clients, the primary benefits of tokenized deposits in this area include:
- Faster movement of funds across jurisdictions
- The ability to execute transactions outside standard banking hours
- Fewer intermediary processes
- Greater transparency in liquidity management
- Reduced operational workload for treasury teams
A notable example is Citi Token Services, Citigroup’s solution for institutional clients, launched in September 2023. The platform focuses on cross-border payments and liquidity management for large corporations. Its model operates entirely within the banking system and enables clients to use a digital form of bank money rather than external settlement assets such as public stablecoins.
This is particularly important for the corporate sector. In addition to cross-border payments, multinational companies often require tools to manage multi-currency liquidity distributed across regional offices and subsidiaries. Tokenized deposits make it possible to conduct these operations on a near-continuous basis while retaining all the advantages of regulated banking infrastructure.
Corporate Treasury and Working Capital Management
Corporate treasury is another area where tokenized deposits offer clear practical value. Large companies hold funds across multiple banks, jurisdictions, and currencies. As a result, part of their capital may remain trapped within local financial systems, while reallocating liquidity often requires time and coordination across several settlement networks.
In this context, tokenized deposits can help companies:
- Move funds between business units more efficiently
- Reduce excess account balances
- Automate intra-group transactions
- Manage liquidity more effectively across multiple time zones
One of the most notable examples is JPMorgan’s tokenized U.S. dollar deposit initiative, launched in 2025. The project introduced JPMD, a tokenized deposit issued on Base, a Layer 2 blockchain network. The solution complements Kinexys Digital Payments, JPMorgan’s blockchain-based payment platform previously known as JPM Coin.
JPMorgan’s blockchain products are designed for settlement between the bank’s institutional clients and support the around-the-clock movement of bank money in digital form. For corporate users, the platform is more than a faster payment rail. It serves as part of a broader liquidity management framework that enables funds to be transferred more efficiently while allowing certain transactions to be preconfigured for specific financial conditions.
Tokenized Asset Settlement
The rise of asset tokenization created a separate demand for tokenized forms of money. When a bond, fund unit, or other financial instrument exists and trades in a digital environment, settlement is ideally conducted using a compatible form of money. Otherwise, a technological gap emerges: the asset is transferred through new digital mechanisms, while payment still relies on traditional financial infrastructure.
In transactions involving tokenized assets, tokenized deposits can serve as the settlement medium. Their role is particularly important in transactions that require the simultaneous fulfillment of two obligations: the transfer of the asset and the transfer of funds. The programmability of tokenized deposits can reduce settlement risk by helping ensure that one side doesn’t fulfill its obligation while the other fails to do so.
This use case is being actively explored through Project Guardian, an initiative led by the Monetary Authority of Singapore (MAS). Among other objectives, the project examines the application of tokenization in capital markets, including transactions involving tokenized bonds, funds, and other financial instruments. In such cases, not only is a digital representation of the asset required, but also a reliable settlement environment where regulated forms of digital money can be used.
A similar approach can be seen in Swiss initiatives focused on deposit tokens. Swiss banks and industry associations view them as a potential alternative to stablecoins for transactions involving digital assets. The objective isn’t everyday payments. Instead, these efforts aim to create a settlement environment for digital assets, securities, and other financial instruments.
Interbank Settlement and Infrastructure Modernization
Tokenized deposits are important not only for bank customers but also for interactions between financial institutions themselves. Today, interbank settlement often relies on a sequential process that includes message exchanges, data verification, record updates across multiple systems, and the final settlement of obligations using central bank money.
The challenge isn’t that the existing infrastructure doesn’t work. It is reliable, but it is also complex and fragmented. For high-volume transactions involving numerous participants, this structure creates additional costs and operational inefficiencies.
In the context of interbank settlement, tokenized deposits could help:
- Synchronize records across participating institutions
- Reduce discrepancies between accounting and settlement systems
- Automate selected stages of the settlement process
- Create a closer link between customer payments and interbank settlement
- Preserve the role of central bank money as the foundation of final settlement
The most comprehensive example is Project Agorá, an initiative led by the Bank for International Settlements (BIS). Participants are exploring how tokenized commercial bank deposits can interact with digital forms of central bank money in cross-border settlement and whether the existing two-tier financial architecture can be modernized. Under this model, central banks remain responsible for final settlement, while commercial banks continue to serve end customers.
Project Agorá brings together 7 central banks and more than 40 commercial banks and financial institutions, including Citi, HSBC, Deutsche Bank, JPMorgan, Santander, UBS, Mastercard, Visa, and SWIFT. Against this backdrop, tokenized deposits are increasingly being viewed not merely as a banking innovation, but as a potential component of future regulated settlement infrastructure.
Programmable Payments and Financial Process Automation
In traditional banking, fund transfers and the fulfillment of contractual obligations often exist as separate processes. A contract establishes the obligations, the parties verify that the required conditions have been met, and only then is the payment initiated. Tokenized deposits make it possible to link and automate these stages.
In a corporate setting, this functionality can support a range of use cases, including:
- Payment upon delivery confirmation
- Automatic distribution of funds among transaction participants
- Payment execution following the completion of a contractual milestone
- Trade finance settlement
- Management of spending limits and access conditions for funds
One example of this approach is HSBC’s Tokenised Deposit Service (TDS), launched in May 2025. Designed for corporate clients, the platform enables the use of tokenized deposits for cross-border settlement within the banking system. The solution helps simplify and automate financial processes that previously required significant time and resources.
For example, it enables closer integration between settlement and operational workflows. In this model, payment is no longer a separate step that follows the fulfillment of obligations. Instead, it becomes part of a unified transaction execution mechanism.
Institutional Significance of Tokenized Deposits
Real-world projects show that tokenized deposits are emerging primarily as a tool for institutional financial infrastructure. Their core user base includes banks, large corporations, payment providers, custodians, asset managers, and capital market participants.
At this stage, several key conclusions can be drawn:
- Demand is concentrated in the corporate and interbank segments.
- Tokenized deposits are being integrated into the existing banking model rather than replacing it.
- Their primary value lies in settlement processes where speed, risk reduction, automation, and record consistency are critical.
- Digital capital markets and the growth of the RWA sector are increasingly driving the demand for tokenized deposits.
- Public institutions are actively involved in shaping the regulatory framework, increasing the likelihood that the sector will evolve within a regulated environment rather than through purely market-driven mechanisms.
Tokenized deposits can no longer be viewed as an experimental technology. Widespread adoption is still ahead, but the world’s largest banks and financial institutions are already incorporating them into real business operations. Against this backdrop, the dominant trend today is a shift from technological testing to infrastructure integration.
As a result, tokenized deposits could become an important component of a financial system in which bank money is fully compatible with digital assets, automated transactions, and programmable settlement infrastructure.
