Why tokenized deposits is a MUST for every bank? pt.2
- Harvey
- Sep 18
- 5 min read
Welcome to Part 2 of the Why Tokenized Deposits Are a MUST for Every Bank series.
Stablecoins have proven to be a powerful digital innovation for cross-border payments, especially in emerging market corridors where banking and payment infrastructure is underdeveloped.
But they also pose a serious risk to traditional banking. The U.S. Treasury Borrowing Advisory Committee has warned that as much as $6.6 trillion or around 40% of U.S. retail deposits could migrate into stablecoins or tokenized money market funds, threatening the very foundation of bank funding models. Analysis on the impact of deposit outflow on US banking system in Part 1.
To avoid that outcome, banks must evolve.
Tokenized deposits - commercial bank deposits issued natively on blockchain rails - are not a nice-to-have innovation. They are a strategic necessity.
In this Weekly Research note, we’ll examine how banks can counteract stablecoins' three biggest advantages via tokenized deposits:
Ease of access - anyone with an internet connection can hold stablecoins, often with minimal onboarding.
Yield - stablecoins increasingly act like dollar savings products through rewards and yield programs.
Interoperability - stablecoins are plugged into a growing ecosystem of applications and settlement rails.
Let’s dive in.
1. Ease of Access
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