Tokenized Deposits

What is a tokenized deposit? It is money a bank owes you, written to a blockchain or similar shared database (a distributed ledger) instead of only to the bank's internal books. The token can move between approved wallets at any hour, but the claim behind it is the same claim you hold on a current account.

What a Tokenized Deposit Is, Legally

Regulators have started to say so in writing. Canada's banking supervisor, OSFI, put it plainly in a September 2026 statement: "The underlying technology of a financial product or service does not determine its legal nature," and tokenized deposits "are, for example, not legally distinct from traditional deposits." The usual bank rules on technology and third party risk still apply.

US law draws the same line from the other side. The GENIUS Act, the 2025 federal stablecoin law, says a payment stablecoin does not include a deposit, "including a deposit recorded using distributed ledger technology", and says nothing in it limits a bank's authority to issue "digital assets that represent those deposits".

Who Owes You, and What About Deposit Insurance

Your counterparty is the bank. You carry its credit risk, and the money sits on its balance sheet like any other deposit. There is no separate pool of reserves set aside for token holders.

Whether deposit insurance covers the token is a question of national law. In the US, the FDIC proposed in April 2026 that the application of deposit insurance "does not depend upon the technology or recordkeeping used" to record a bank's deposits. That is a proposal, not a final rule, and the usual limits still apply. Check with the bank rather than assuming.

How It Differs From a Stablecoin

A payment stablecoin is a claim on its issuer, usually not a bank, backed by reserves it holds. The GENIUS Act requires reserves of at least one to one, bars issuers from paying holders "any form of interest or yield", and says payment stablecoins are not subject to FDIC deposit insurance. For how those reserves work in practice, see how stablecoins hold a dollar.

None of that reaches a tokenized deposit, because the Act defines deposits out. Nothing in it stops a bank paying interest on one, as on any account; whether a given product does is the bank's choice. Access differs too. Most dollar stablecoins move to any compatible wallet unless the issuer freezes the address, while today's tokenized deposits are open only to a bank's vetted clients.

Examples

JPMorgan describes its JPM Coin (ticker JPMD) as "a bank-issued deposit token" and "not a cryptocurrency or a stablecoin", backed by dollar deposits at the bank, on its product page. It launched on Base, Coinbase's Ethereum layer two, in November 2025, is also issued on Ethereum, and only vetted, approved counterparties can hold it. HSBC launched a Tokenised Deposit Service for corporate clients in Hong Kong in May 2025, settling Hong Kong dollar and US dollar payments around the clock on its own network. Both serve institutions, not individuals.