America’s largest banks are preparing a direct response to one of the fastest-growing crypto products: stablecoins.
JPMorgan Chase, Bank of America, Citigroup and other major lenders said Friday they plan to launch a network of shared tokenized deposits through The Clearing House by the first half of 2027. The project would allow bank deposits to move across blockchain infrastructure with 24-hour settlement, giving traditional bank money some of the same capabilities that have helped stablecoins gain traction.
The move highlights growing competition to become the preferred form of cash on blockchain networks.
“In the wake of the GENIUS Act, a competition appears to be emerging between stablecoins, tokenized deposits, and tokenized money market funds to become the preferred on-chain cash instrument,” said Reid Noch, vice president of U.S. equity market structure at TD Securities.
Stablecoins, specifically Circle’s USDC (CRCL) and Tether’s USDT, currently dominate that market. Dollar-pegged tokens are widely used for cryptocurrency trading, cross-border payments, and increasingly for savings products. But banks are concerned that if stablecoins become popular, deposits could migrate from traditional accounts to crypto wallets.
Tokenized deposits allow banks to add customers to the chain without losing control of their deposits. A customer’s bank deposit would be represented as a digital token that can move across blockchain rails. Unlike stablecoins, the funds would remain within the banking system.
Noch said tokenized deposits address long-standing inefficiencies in global payments.
“Anyone who has ever transferred money, especially internationally, knows that the process can be expensive and often takes one or two business days to complete,” Noch said. By using blockchain infrastructure, tokenized deposits could enable near-instant transfers 24 hours a day, while reducing settlement costs and frictions, he said.
The initiative also signals the extent to which blockchain technology has advanced into the financial mainstream.
“America’s largest banks are voluntarily joining the chain,” said Digital Chamber CEO Cody Carbone. “When the country’s largest institutions decide the future of blockchain finance, they are demonstrating exactly what our industry has been building toward from the beginning.”
Significant competition
Still, the banking industry’s approach differs markedly from cryptocurrencies’ view of open networks.
Noelle Acheson, author of “Crypto is Macro Now,” noted that banks have spent years experimenting with private blockchain systems that move money internally while maintaining tight control over users and transactions. The planned Clearinghouse network expands that model to multiple banks, but remains far removed from public blockchain ecosystems where stablecoins circulate freely.
Acheson argued that the project demonstrates that banks are taking stablecoins seriously despite public comments from some executives, including JPM CEO Jamie Dimon, who downplayed the threat. While stablecoins offer greater liquidity and flexibility, he said many corporate clients may prefer a bank-backed system that fits within existing compliance frameworks.
In a March report, Jeffries said he estimates stablecoins could lead to a 3% to 5% drain on core deposits over the next five years and reduce average bank profits by about 3%.
The result could reshape the way money moves on blockchain networks.
If successful, the Clearing House initiative could become a major competitor to stablecoins for corporate payments and treasury operations. At the same time, it underscores a broader trend: traditional finance is increasingly embracing blockchain technology, even as it competes with crypto-native alternatives built on the same infrastructure.
