Institutional Digital Money: From Proprietary Platforms to Shared Interbank Rails

The Evolution of Institutional Digital Money

Institutional digital cash is evolving rapidly as tokenized deposits, blockchain-based payments and tokenized securities settlement move into production. Rather than converging around a single form of digital money, banks and financial institutions are developing at least five distinct digital-cash and settlement architectures:

1. Proprietary bank tokenized-deposit platforms such as JPMorgan's Kinexys platform

2. Shared networks for independently issued bank deposits focused on domestic interbank payments such as Cari Network

3. Interoperability layers connecting separate bank ledgers such as Swift

4. Multi-bank clearing and settlement networks such as Partior

5. Wholesale digital cash backed by central-bank reserves such as Fnality

Proprietary tokenized deposits remain the leading model

With daily transaction volume totalling single digit billions, the most mature implementations have so far come from global banks building proprietary tokenized-deposit platforms:

• JPMorgan has developed proprietary blockchain-based deposit infrastructure through Kinexys.

• Citi offers tokenized cash and trade capabilities through Citi Token Services.

• HSBC and other global institutions are developing comparable platforms for corporate and institutional clients.

The biggest GSIBs can fund the underlying blockchain, identity, wallet, compliance, liquidity and integration infrastructure internally. They also have sufficiently large client networks to create activity within their own platforms.

However, most of these systems remain principally intra-bank networks. They allow customers of the same bank to transfer value on that institution’s proprietary ledger.

This improves speed and availability, but the money largely remains within a single bank’s network.

But outside the largest global banks, most institutions lack the resources or the commercial justification to build and operate their own blockchain infrastructure.

Most banks cannot justify proprietary infrastructure

There are approximately 3,850 community banks in the United States and around 2,000 smaller and medium-sized banks in the euro area. Many cannot independently justify the cost and operational complexity of developing a proprietary tokenized-deposit network.

This is not unusual in banking.

Smaller banks do not independently build every component of the traditional payment stack. Instead, they use a combination of:

• Direct access to central-bank accounts and settlement systems

• Correspondent banks for selected payment and liquidity functions

• Third-party processors for connectivity

• Cooperative or banking-group infrastructure

• Central-bank systems such as Fedwire, FedNow, T2 and TIPS

• Private networks and payment overlays such as ACH operators and Zelle

This allows banks to retain their licences, balance sheets and customer relationships while consuming common infrastructure for moving and settling money.

Institutional onchain finance has, until recently, offered relatively little of this optionality. Banks have generally had to build proprietary infrastructure, join a platform controlled by another large institution or remain outside the market.

That is now beginning to change.

Cari proposes shared infrastructure with bank-led governance

Cari Network is developing a common tokenized-deposit network with six US Design Partner Banks - First Horizon Bank, Huntington Bank, KeyBank, M&T Bank, Old National Bank and SouthState Bank.

Instead of requiring each bank to develop a complete platform, Cari separates the technology, operational, governance and issuance layers:

• ZKsync’s Prividium provides the private, permissioned blockchain, with transaction data kept confidential and cryptographic proofs anchored to Ethereum.

• Fireblocks provides wallets, operational infrastructure and role-based controls down to individual smart-contract functions.

• Cari Network provides the rulebook, participation requirements, risk standards and governance framework.

• Member banks issue the tokenized deposits, which remain liabilities on their respective balance sheets and eligible for FDIC protection up to applicable limits.

Cari can make bank-issued deposits mutually reachable on one network. The harder task is making those liabilities functionally fungible at par without introducing unacceptable liquidity, credit or settlement exposure.

This requires more than a blockchain. The participating banks must agree on:

• How the liabilities of different issuers are represented

• How liquidity and redemption are managed

• Which institution carries settlement and counterparty exposure

• How compliance responsibilities are allocated

• How losses, disputes and operational failures are handled

• How network rules are enforced across independently regulated banks

  
  

Cari’s rulebook and bank-led governance may therefore prove as important as its underlying technology.

Swift is creating an orchestration layer across bank-issued deposits

While Cari is focused on domestic interbank payments in the US, SWIFT is tackling the cross-border market.

Rather than asking banks to issue deposits on one common ledger, Swift’s new blockchain-based shared ledger is designed to coordinate tokenized deposits that banks continue to issue and record on their own systems.

On 9 July 2026, Swift announced that the ledger was ready for initial use, Swift announced that the ledger was ready for initial use. Seventeen banks are preparing to pilot live transactions using tokenized deposits for 24/7 cross-border payments.

The key architectural distinction is that Swift does not issue the digital money.

Its ledger provides an orchestration and coordination layer across bank-issued tokenized deposits held on separate bank ledgers. Funds can move for customers outside conventional operating hours, with final settlement subsequently completed through existing payment systems.

This allows participating banks to retain:

• Control of their deposit liabilities

• Their existing ledgers and client systems

• Their compliance and risk-management frameworks

• Their established settlement arrangements

  
  

Swift is effectively attempting to make tokenized deposits interoperable without requiring every bank to migrate its liabilities onto a single shared issuance platform.

Its advantage is distribution. Swift already connects more than 11,000 financial institutions across over 200 markets. If the new ledger can reuse that institutional connectivity, it could offer smaller banks a route into tokenized payments without requiring them to join a network controlled by a competitor.

However, Swift must still demonstrate that an orchestration layer can deliver genuine 24/7 economic settlement, not merely instant messaging followed by deferred settlement through conventional rails.

Partior creates a shared multi-bank clearing and settlement network

Partior introduces another model: a shared, multi-currency ledger through which banks can clear and settle cross-border payments in real time.

It does not depend on every institution building a proprietary network. Nor does it simply transmit instructions between separate correspondent banks.

Partior provides a common clearing and settlement infrastructure with:

• 24/7 multi-currency processing across USD, EUR and GBP

• Concurrent payment and compliance validation

• Real-time liquidity visibility

• A multilateral network rulebook

• Integration with banks’ existing infrastructure

Fnality provides wholesale digital cash backed by central-bank reserves

Fnality addresses a different problem: the quality of the settlement asset used for tokenized securities and wholesale transactions.

Tokenized deposits remain liabilities of commercial banks. That introduces issuer-specific credit, liquidity and convertibility considerations.

Fnality instead provides participating institutions with a digital representation of funds held at the central bank.

Its Sterling Fnality Payment System is a Bank of England-regulated payment system.

Participants fund an omnibus account at the central bank, and the corresponding digital cash can then be used for real-time, programmable and 24/7 settlement across Fnality’s private network.

What matters next

These models are not necessarily mutually exclusive. A bank could:

• Issue tokenized deposits through its own platform

• Connect those deposits to Swift for cross-border reach

• Use Partior for particular payment corridors

• Use Fnality for the cash leg of tokenized securities transactions

• Join a Cari-style consortium to share infrastructure with other banks

  
  

The institutional digital-cash market may therefore develop as a network of complementary money and infrastructure layers rather than around one universally dominant token.

The central strategic question is no longer whether banks can create digital money.

The technology required to issue a tokenized deposit is increasingly available.

The harder challenge is building an institutional architecture in which different forms of digital money can move across banks, platforms, currencies and tokenized-asset networks with sufficient liquidity, legal certainty and settlement finality.

Disclaimer: This material is provided for informational and educational purposes only and does not constitute investment, legal, tax or financial advice. While reasonable care has been taken, Tokenization Insight makes no representation regarding its accuracy or completeness. Views and information may change without notice.