Key Takeaways:
US banks are moving tokenized deposits from pilot to production, opening a new battleground for blockchain networks — and Hedera is emerging as an early contender for the institutional settlement layer.
US banks are laying the groundwork for tokenized deposits and round-the-clock settlement, a shift that positions blockchain networks built for regulated finance at the center of the next phase of digital money. Hedera, the proof-of-stake network powered by hashgraph technology, is gaining traction as the infrastructure layer for this use case, according to people familiar with the discussions.
"Tokenized deposits keep the liability inside the regulated banking system," Ravi Chamria, cofounder and chief executive officer of Zeeve Inc., a blockchain infrastructure provider, said. "When a bank customer converts an ordinary deposit into a tokenized deposit, the asset does not need to leave the banking balance sheet."
The push comes as stablecoin market capitalization exceeded $300 billion in November 2025, turning what was once a niche crypto product into a serious monetary tool, according to data from DefiLlama. Under the GENIUS Act, stablecoin issuers must back tokens 100% with cash or high-quality liquid assets, effectively removing those dollars from the fractional-reserve banking system. Tokenized deposits offer banks a way to meet customer demand for programmable money without surrendering their role in credit creation.
The stakes are significant. Every dollar that moves from bank deposits to nonbank stablecoin issuers reduces a bank's capacity to fund loans through traditional deposit-based intermediation, Chamria said. Tokenized deposits preserve the link between money and credit creation, keeping commercial bank money inside the regulated perimeter while enabling atomic settlement and always-on transfers.
Citi's Token Services platform, live since 2024, already allows corporate clients to move funds between locations such as New York and Singapore with near-instant finality while maintaining existing fiat accounts and balances. The Depository Trust & Clearing Corporation, which processed $4.7 quadrillion in securities transactions in 2025, plans to take its own tokenization network live in October 2026 after receiving a no-action letter from the Securities and Exchange Commission in December 2025.
For Hedera, the institutional focus represents a distinct positioning among Layer 1 networks. Unlike public blockchains optimized for decentralized finance or speculative trading, Hedera's hashgraph consensus offers the throughput, finality and governance structure that regulated financial institutions require. The network's governing council includes Google, IBM, Deutsche Telekom and Boeing, providing the enterprise credibility that banks demand for settlement infrastructure.
The opportunity extends beyond Hedera. The Bank for International Settlements' Project Agorá, involving eight central banks, is creating a common platform for cross-border payments using tokenized deposits. Banks including JPMorgan Chase, Goldman Sachs and Citi are exploring their own tokenized deposit initiatives, according to industry participants.
The next phase depends on interoperability. The full potential of tokenized deposits will only be realized when different platforms can communicate, Chamria said. Banks need compliant blockchain infrastructure partners that understand regulated finance, not just token issuance — identity, permissioning, privacy, monitoring and core banking integration must be designed from day one.
This article is for informational purposes only and does not constitute investment advice.
