JPMorgan Chase, Bank of America, and Citigroup are preparing to launch a shared tokenized deposit network that is expected to go live in 2027, marking one of the most significant coordinated moves by major US banks into blockchain-based settlement infrastructure.
According to a WSJ report, the project is being developed alongside other large financial institutions, including Wells Fargo, through The Clearing House, the US banking industry’s privately operated payments network.
The system is expected to allow commercial bank deposits to be represented digitally on a shared ledger, enabling real-time transfers between participating banks without relying on traditional batch settlement cycles.
A shared banking network built on tokenized deposits
At the centre of the initiative is the concept of tokenized deposits, which are not new cryptocurrencies or externally issued stablecoins but rather a representation of existing commercial bank deposits in digital form recorded as liabilities on the balance sheets of issuing banks such as JPMorgan Chase or Bank of America.
The planned network will allow these tokenized deposits to move instantly between institutions.
If successful, transactions that normally take hours or even a full business day under legacy systems could be settled within seconds, operating continuously on a 24-hour, seven-day basis.
The Clearing House will serve as the infrastructure operator for the system, extending its role in US payments clearing into a blockchain-based environment.
This structure keeps the network inside the regulated banking system, rather than shifting transactions onto public crypto networks.
A coordinated response to stablecoins and crypto payment rails
The decision by major banks to build a shared tokenized system is closely linked to the rapid growth of blockchain-based payment instruments outside traditional finance.
Stablecoins such as USD Coin and USDT have grown into widely used settlement tools in crypto markets, enabling fast and global transfers of dollar-denominated value without direct reliance on bank payment rails.
Bank executives involved in the initiative have positioned tokenized deposits as a direct response to this trend.
Instead of allowing deposit-based money to flow into external digital payment systems, banks are building their own blockchain-enabled infrastructure that retains funds within regulated institutions.
Under the planned model, every tokenised deposit remains fully backed by actual bank deposits to keep the system aligned with existing regulatory frameworks and preserves the role of commercial banks as the primary custodians of dollar liquidity.
Infrastructure design and institutional focus
The network is being developed as a shared infrastructure layer rather than a consumer-facing product.
Initial usage is expected to focus on large institutional clients, including multinational corporations and treasury departments managing high-volume cash flows.
These users often move large sums across multiple banking relationships and jurisdictions.
Under the current system, such transactions rely on correspondent banking networks and cut-off settlement windows.
The new tokenised system is designed to remove these delays by enabling continuous liquidity movement across participating banks.
The Clearing House has long handled high-value payment processing in the United States, but this expansion introduces a blockchain-based settlement mechanism into its core operations.
The system is being described internally as a connective “bridge” between traditional banking ledgers and emerging digital settlement technologies.
The network is currently under development, with industry-wide expectations pointing to pilot phases before broader deployment.
The target launch timeline is set for the first half of 2027, although internal testing and phased integration across participating banks will likely take place beforehand.
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