What is a tokenized deposit, and how is it different from a stablecoin?

A tokenized deposit is an ordinary bank deposit that is recorded and moved as a digital token on a blockchain. The money is still a liability of the bank that issued it, just like the balance in a checking account. The token is a new way to transfer that balance, not a new kind of money.

What is the difference between tokenized deposits and stablecoins?

The key difference is who owes you the money. With a tokenized deposit, the bank owes it. With a stablecoin, a stablecoin issuer owes it and, under US law, backs each coin one-to-one with reserves such as dollars and Treasury securities, as Covington explains.

US law now draws this line clearly. According to a Latham and Watkins summary, the GENIUS Act excludes deposits as defined in the Federal Deposit Insurance Act from the definition of a payment stablecoin, including deposits recorded on a distributed ledger. The same summary says the act bars stablecoin issuers from paying holders interest or yield. Read more in what is the GENIUS Act.

The Bank for International Settlements (BIS) made a related point in 2023. It said stablecoins circulate like bearer instruments and can trade away from their dollar value. Tokenized deposits settle in central bank money, which the BIS said fits better with the idea that every form of a currency should be worth the same.

Are tokenized deposits FDIC insured?

In April 2026, the FDIC proposed a rule saying its definition of a deposit is technology neutral, according to Sullivan and Cromwell. Under that proposal, a tokenized product that meets the legal definition of a deposit would be treated like any other deposit for insurance purposes. The same proposal says stablecoin reserves held at a bank would not pass insurance through to stablecoin holders. As of October 2026, this was a proposal, so final rules may differ. For the wider picture, see is crypto insured.

What is the JPMorgan deposit token?

In June 2025, JPMorgan announced a proof of concept for JPMD, a US dollar deposit token on Base, an Ethereum layer 2 network built within Coinbase. The bank described it as yield-bearing commercial bank money that can pay interest to holders. It is permissioned, meaning only approved clients can hold it.

The Block reported in November 2025 that JPMorgan had rolled it out for institutional clients, with firms such as B2C2, Coinbase and Mastercard testing transactions. It is designed for near-instant transfers at any hour.

Why are banks tokenizing money?

The BIS noted that tokenized deposits can sit on programmable ledgers, letting payments run automatically when conditions are met and connect with other tokenized assets. JPMorgan pitched JPMD for round-the-clock settlement. This ties into the wider trend of tokenization of real-world assets.

Rules differ by country and change often. Check the regulator or a qualified professional for your own situation.