JPMorgan Chase and Citigroup plan to launch a tokenized deposit network next year. The two big U.S. banks are working together to build a system that would let customers transfer digital versions of their deposits directly between the institutions. If it goes live, the network would be one of the first shared blockchain-based deposit platforms operated by major banks.
How tokenized deposits work
Tokenized deposits are digital representations of traditional bank deposits recorded on a blockchain. Each token represents a claim on a real dollar held at the issuing bank. Unlike stablecoins, which are typically backed by reserves held at third parties, tokenized deposits remain inside the regulated banking system. The idea is to let payments settle faster, maybe in seconds, and to make transfers more transparent for banks and their customers.
The network JPMorgan and Citi are building would connect their separate tokenized deposit systems. A customer at Citi who wants to send money to a JPMorgan account could, in theory, do so directly through the shared infrastructure without moving funds through a central clearinghouse or waiting for batch processing overnight.
Why the two banks are teaming up
JPMorgan and Citi are normally fierce competitors in everything from lending to trading. But building a tokenized deposit network that actually scales requires common standards. No single bank can create an interoperable system on its own. By working together, the two institutions can settle on a shared protocol, test it with real transactions, and then try to push that standard across the broader banking industry.
Both have been dabbling in blockchain for years. JPMorgan already runs its own permissioned blockchain platform for interbank payments, called Liink. Citi has been experimenting with tokenized deposits in pilot projects. The new network would combine those efforts into a single system that both banks can use.
What the network would look like
The network is supposed to handle tokenized deposits — not cryptocurrencies or stablecoins like USDC. Each token would be redeemable one-for-one for a dollar at the issuing bank. That means no price volatility. Deposits would still be insured by the FDIC because they remain inside the bank's balance sheet.
To make a transfer, the sending bank would destroy its token and create a new token at the receiving bank. The underlying fiat cash would move through existing reserve accounts. The blockchain layer just tracks ownership and speeds up settlement.
The two banks have not said how many customers will get access initially, or whether the network will eventually open to other banks. The plan for now is a 2025 launch, though no exact month has been set.
The idea fits into a bigger push among U.S. banks to digitize the dollar without giving up control to private crypto networks. The Federal Reserve has been watching tokenization closely, though it hasn't given its blessing to any specific private-sector project. JPMorgan and Citi are betting a shared, regulated tokenized deposit system can work within existing rules.
