Leading U.S. Banks Join Forces On Tokenization Network

2026-06-05 09:43:00 ET

Top U.S. banks JPMorgan Chase (NYSE: ), Bank of America (NYSE: ), and Citigroup (NYSE: ) are joining forces on a new tokenization network.

The biggest American banks plan to build a shared tokenized deposit network by the first half of 2027 to protect their deposits from the threat posed from stablecoins.

The system will be operated by The Clearing House, the payments company collectively owned by the banks. Internally, the banks are calling the tokenized network “the bridge.”

Tokenized deposits are blockchain representations of customers' money held at major U.S. banks.

The new system will convert deposits into digital tokens that can be transferred quickly on a blockchain.

The move comes as JPMorgan, Bank of America, and Citigroup grow increasingly worried about stablecoins competing against them for customer deposits.

The banks have lobbied heavily in Washington, D.C. over the past year to try and prevent stablecoins from offering yield on deposits similar to the interest provided on bank accounts.

Stablecoins are cryptocurrencies whose value is pegged to another asset, typically the U.S. dollar. Leading stablecoin issuers such as Circle (NYSE: ) are pushing to offer yield.

The Clarity Act legislation currently winding its way through Congress could allow stablecoins to pay yield and other rewards to consumers, making bank deposits less attractive.

If customers adopt stablecoins at scale, banks could face a deposit flight to crypto wallets. Deposits are what banks rely on to extend credit and help fund their ongoing operations.

The tokenized network is designed to ensure that deposits remain within the banking system while giving them crypto-like speed and settlement capabilities, according to media reports.

The Clearing House reportedly expects large multinational banks outside the U.S. to also embrace the tokenized deposit network as they look to stave off the threat from stablecoins.

The stock of JPMorgan Chase, the largest U.S. bank, has gained 19% over the last 12 months to trade at $310.89 U.S. per share.