Barclays explores tokenized bank deposits and payments

Barclays is reportedly engaging technology providers to assess building a blockchain-based platform for tokenized bank deposits and payments.

Source: Bloomberg

➡️ Why this matters

Tokenized deposits are becoming table stakes for large banks. It is their critical defensive play against stablecoin's encroachment on their payment business.

For GSIBs who have it - namely the few GSIBs such as JPMorgan, Citi and HSBC - are actively deploying it across their payment and capital markets businesses with billions in daily volume.

For those who don't have it must urgently upgrade their internal capabilities or risk losing clients, especially in transactional banking.

HSBC has already cleared tokenized GBP deposits.

Pressure is mounting on domestic peers such as Barclays and Natwest to build comparable digital asset infrastructure.

Stablecoin represents a different and most likely secondary set of businesses in stablecoin custody, reserve management and on/offramp fees as it represents a fundamentally different business model to the fractional banking on which all banks operate.

✅ Want more insights on the business of tokenization and digital assets? Join the Insider's Club for more exclusive insights, strategies and resources.