Major U.S. financial institutions announced a joint initiative to build infrastructure for clearing and settlement using tokenized bank deposits. The project will combine blockchain technology with the U.S. payments system and enable 24/7 transaction processing.
A group of leading U.S. banks unveiled a new platform for tokenized deposits. The solution is designed to connect transactions conducted on blockchain networks with traditional banking payment rails while providing scalable clearing and settlement capabilities for financial institutions.
The project will be operated by The Clearing House, a U.S. payments company owned by 25 of the country’s largest financial institutions and responsible for managing key payment networks. The new infrastructure will focus on two primary areas:
- clearing and settlement between banks using tokenized deposits within the existing banking system;
- integration of blockchain transactions with the RTP and CHIPS payment networks to facilitate the exchange of digital and fiat forms of bank money.
Tokenized deposits are conventional bank deposits issued in the form of digital tokens. This approach enables programmable payments and automated financial processes while remaining within the current regulatory framework. It also allows banks to retain their central role in lending, liquidity management, and the broader economy.
The Clearing House (TCH) operates the primary payment networks in the U.S., including ACH, CHIPS, and RTP, which process and settle more than $2 trillion in transactions each day.
According to David Watson, CEO of The Clearing House, the initiative will bring together blockchain-based solutions and regulated banking infrastructure that delivers settlement reliability, resilience, and a high level of security.
The project has received support from some of the largest participants in the U.S. banking sector, including Bank of America, Citi, JPMorgan Chase, Wells Fargo, HSBC, BNY, Santander, TD Bank, U.S. Bank, PNC Bank, Regions Bank, Citizens Financial Group, and several other financial institutions.
Citi said that the growth of tokenized deposits and digital securities requires a unified interbank infrastructure capable of supporting around-the-clock settlement. JPMorgan noted that a regulated clearing system will be one of the key building blocks for scaling payments in blockchain environments.
The new network is expected to be available to financial institutions across the U.S., regardless of size. This will allow banks to connect to the expanding digital payments ecosystem through a single interoperable infrastructure.
Potential use cases for the platform include:
- Real-time corporate liquidity management;
- Treasury automation;
- Cross-border payments;
- Digital asset settlement;
- Programmable payments and automated financial processes;
- Support for emerging forms of digital commerce.
Participants in the initiative said they will continue working together on interoperability standards, implementation frameworks, and new use cases for tokenized deposits within the emerging digital financial infrastructure.
In March, Monument Bank in the U.K. announced a retail deposit tokenization solution on the public Midnight blockchain network. The project became the first initiative of its kind among regulated banks in the U.K.
