Tokenized deposit

A tokenized deposit is an ordinary bank deposit whose record is kept as a token on a blockchain. The bank still owes you the money, so bank rules travel with it: supervision, deposit insurance when the account qualifies, and interest if the bank decides to pay some. Many banks say “deposit token” instead.

A February 2023 report by Oliver Wyman and Onyx, then J.P. Morgan’s blockchain unit, made the term common without inventing it. The bank describes its own JPM Coin as backed by dollar deposits at J.P. Morgan and “not a cryptocurrency or a stablecoin”.

How a tokenized deposit works, from mint to burn

Taking J.P. Morgan’s product as the model, the cycle runs like this:

1. A client keeps dollars in a dedicated account, which J.P. Morgan calls a Blockchain Deposit Account.
2. On request, the bank debits the account and issues the same amount as tokens to a wallet address it has approved.
3. The tokens move between vetted counterparties at any hour. The transfer is the settlement.
4. To cash out, the holder returns the tokens; the bank destroys (“burns”) them and credits the account one for one.

The liability stays on the bank’s balance sheet. The European Banking Authority said in December 2024 that tokenizing a deposit does not by itself change the nature of the claim.

Tokenized deposit vs stablecoin vs CBDC: who owes you the money

In a wallet the three look alike; the debtor separates them. With a tokenized deposit, it is a commercial bank. With a stablecoin, it is the issuing company, backed by reserves. With a central bank digital currency (CBDC), it is the central bank itself.

The law draws the same line. The US GENIUS Act of July 2025 says a deposit recorded on a distributed ledger is not a “payment stablecoin”, and it bars stablecoin issuers from paying holders interest or yield. In the EU, MiCA excludes deposits from its scope, and the EBA confirmed in December 2024 that tokenized deposits fall outside MiCA.

Worked example: $10,000 held for one year

Hypothetical, rate frozen for a year. Put $10,000 in a tokenized deposit paying 4.40% APY, the variable rate SoFi reported for its consumer token at launch. APY already includes compounding, so 10,000 x 0.044 = $440. The balance ends at $10,440, about $36.67 a month (440 / 12) before tax.

Hold the same $10,000 in a payment stablecoin and the issuer adds nothing, since the GENIUS Act bars issuers from paying interest. The gap is $440, or 4.4% of the balance.

FDIC cover stops at $250,000 per depositor, per bank, per ownership category: with $300,000 at one US bank, $50,000 (300,000 – 250,000) would be uninsured if the bank failed. The EU guarantee is €100,000 per depositor per bank.

Banks already issuing deposit tokens

J.P. Morgan’s JPM Coin went live for institutional clients on Base on 12 November 2025. Ledger Insights reported on 19 October 2026 that it had been issued on Ethereum mainnet, and the bank’s product page now lists both chains. Our report on JPM Coin reaching Ethereum has the details.

HSBC brought its Tokenised Deposit Service to the United States on 13 April 2026, after Hong Kong, Singapore, Luxembourg and the UK, for corporate and institutional clients.

SoFi chose consumers: on 22 October 2026 it announced SoFi Earn (SOFIE), which it presents as the first consumer tokenized deposit issued by a US national bank. According to SoFi, each SOFIE represents a dollar on deposit at SoFi Bank, eligible for FDIC insurance within the usual limits. Our story on the SoFi launch covers the rollout.

Central banks lean the same way. The BIS 2025 annual report sees tokenised bank money building on the two-tier system, with stablecoins at best in a subsidiary role.

Risks and limits of tokenized deposits

Above the insurance cap, or if a product does not qualify, a bank failure hits the holder like any uninsured depositor. We found no statement from J.P. Morgan on whether JPM Coin balances carry FDIC cover.

Approved-address lists and identity checks keep each bank’s tokens inside its circle of vetted clients. A JPM Coin cannot go to any wallet the way a stablecoin can, and linking different banks’ tokens is still unsolved.

The legal border can blur. The EBA says it will keep monitoring how tokenised deposits compare with e-money tokens, and a bank token built to trade freely could end up under MiCA.

What tokenized deposits change for savers

SoFi aside, these services serve institutions. For Europeans, the question is who issues tokenized euros. On 26 March 2026, Banque de France First Deputy Governor Denis Beau called for private money from regulated European firms, tokenised deposits and euro stablecoins among them, to coexist at par with central bank money.

Tokenized deposits: questions readers ask

Is a tokenized deposit a stablecoin?

No. A tokenized deposit is money a bank owes you, recorded as a token. A stablecoin is a claim on its issuer, backed by reserves, with no deposit insurance. The GENIUS Act says it outright: deposits recorded on a distributed ledger are not payment stablecoins.

Are tokenized deposits FDIC insured?

They can be. An FDIC proposal approved on 7 April 2026 would treat tokenized deposits that meet the legal definition of a deposit like any other deposit, insured up to $250,000 per depositor, per bank, per ownership category. Each product must still qualify.

How is a tokenized deposit different from a CBDC?

The debtor changes. A tokenized deposit is owed by a commercial bank and depends on that bank’s health, within insurance limits. A CBDC would be owed by the central bank, which issues the currency itself. In the euro area, no digital euro is in circulation yet.

Can a tokenized deposit pay interest?

Yes, at the bank’s discretion, like any deposit. SoFi reported 4.40% APY on its consumer token as of 20 October 2026, a variable rate. Stablecoin issuers cannot match it: the GENIUS Act bars US payment stablecoin issuers from paying interest, and MiCA does the same for e-money tokens.