What Are Tokenized Deposits and Why Are Banks Adopting Them?

• Tokenized deposits let banks move money faster while keeping customer funds in regulated accounts. 
• Unlike stablecoins, tokenized deposits stay inside the banking system and follow existing regulations. 
• Major banks are expanding tokenized deposits, but cross-bank transfers still face technical hurdles.

Banks are increasingly turning to tokenized deposits as they adopt blockchain technology to improve how money moves through the financial system. A new report from Arkham Intelligence says regulated banks are creating digital versions of customer deposits that stay on the banks’ balance sheets while operating on blockchain networks.

This transition helps banks make transactions faster and more automated without disrupting the essential architecture of conventional banking. In contrast to stablecoins, tokenized deposits remain liabilities of the bank and are regulate…

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