Tokenized deposits, also known as deposit tokens, are digital assets that represent fiat currency bank deposits on the blockchain. These tokens are issued by banks, backed by real fiat deposits, and can operate on private or public blockchains. Due to heavy regulation, banks typically maintain complete control over access to these tokens.
For example, JPMorgan’s JPM Coin is a tokenized deposit used to settle transactions among JPMorgan clients. On the other hand, SocGen’s EURCV can be transferred to clients without accounts at the issuing bank, but only after being whitelisted.
Tokenized deposits provide a way to digitize traditional banking processes, offering increased efficiency and security. By leveraging blockchain technology, banks can streamline transactions and provide clients with faster, more transparent services.
As the use of blockchain in banking continues to grow, tokenized deposits are likely to become more common. These digital assets offer a glimpse into the future of banking, where traditional financial systems are enhanced by innovative technology.
