As banks move through chain money, tokenized deposits land
According to a new report from real-world asset data platform RWA.io, banks are exploring tokenized deposits as they test ways to move commercial banking to blockchain-based payment and settlement infrastructure.
The report, written by RWA.io, with contributions from industry participants including UK Finance, Citi, BNI, JPMorgan's Kinexys, Standard Chartered, ABN Amro and Digital Asset, argues that token deposits are emerging as part of a wider onchain cash stack alongside stablecoins and central bank digital currencies.
Tokenized deposits are digital representations of traditional bank deposits on blockchain or other distributed ledger infrastructures. Unlike many stablecoins, they are direct liabilities of the issuing bank and sit within existing banking frameworks, including deposit insurance, capital requirements and anti-money laundering and know-your-customer laws.
The report highlights the growing number of banking pilots and deployment clusters in Europe. In January, Lloyds Banking Group and Arkx said it had completed the UK's first public blockchain transaction using tokenized deposits on the Canton Network, the UK finance giant's British tokenized deposit pilot testing peer-to-peer marketplace payments, remittances and digital-asset agreements in mid-2026.
The broader push reflects how banks are trying to protect their roles in payments, treasury and deposits as digital financial instruments proliferate.
A middle ground in stablecoin as Tokenized deposit, CBDC argument
According to the UK finance report, tokenized deposits will play an important role in the “multi-currency” world of the future. The industry group said they will complement other digital currency deposits “including privately and publicly redeemable funds”.
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According to Marco Widrih, co-founder and CEO at RWA.io, most of the attention in digital money is focused on stablecoins or central bank digital currencies (CBDCs), but the global monetary system still runs on commercial bank money.
“Bringing this money to the digital rails will power the next generation of digital finance,” Vidrieh said. “For that reason, it's important to understand how tokenized deposits, along with stablecoins and CBDCs, fit into the broader digital currency ecosystem.”
The ECB will promote the work of the digital euro, building tokenized money lines
The European policy background is moving in parallel. As US dollar-backed stablecoins continue to dominate digital asset markets and cross-border transactions, the European Central Bank is advancing work on the digital euro.
The ECB recently opened applications for experts to contribute to work streams focused on how the digital euro works in ATMs, payment terminals and acceptance infrastructure. The ECB has said it aims to launch a 12-month pilot for the digital euro in the second half of 2027.
In March, the European Central Bank unveiled Appia, its long-term plan for how financial markets in Europe could operate using central bank money. Central to that plan is Pontes, a new settlement mechanism designed to allow blockchain-based financial platforms to connect to the Eurosystem's existing payments infrastructure.
That infrastructure is already known as TARGET Services, which processes large-value euro payments, guarantees and instant payments across Europe. According to the ECB, Pontes is scheduled to launch in the third quarter of 2026, and feedback gathered during the Appia consultation process will help shape the broader framework for the European financial system.
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