How banks use stablecoins and tokenized deposits

Deposit tokens are bank liabilities; payment stablecoins are issuer liabilities under stablecoin statutes—teach the legal difference.

Custody

Regulated custody is the institutional prerequisite for ETFs, funds, and corporate treasuries. Illustrative providers: Coinbase Custody, BitGo, Anchorage Digital, and bank custodians under evolving regimes.

Deposit tokens

JPMorgan Kinexys (formerly Onyx) runs blockchain deposit accounts for institutional 24/7 payments and JPMD USD deposit-token experiments. Fnality explores wholesale settlement using on-chain representations of central-bank money / deposits. These are legally distinct from payment stablecoins. J.P. Morgan announced a proof of concept for its USD deposit token, JPMD, for institutional clients on Base, a public Ethereum layer-2 network (J.P. Morgan Payments newsroom, June 24, 2025).

Banks issuing payment stablecoins: what regulators proposed

Under the GENIUS Act, one type of permitted payment stablecoin issuer is a subsidiary of an insured depository institution that has been approved to issue payment stablecoins (Public Law 119-27, §2). So a bank-linked stablecoin is a separate issuer’s liability, unlike a deposit token, which is the bank’s own deposit liability. The Federal Reserve Board’s proposed rule (FR Doc 2026-19899, published Sep 29, 2026; comments due Nov 30, 2026) would set the procedures an insured state member bank follows to seek Board approval for such a subsidiary. Separately, the NCUA proposed adding questions on credit unions’ payment stablecoin activities to its Call Report, starting with the March 31, 2027 report date (FR Doc 2026-20729, published Oct 9, 2026; comments due Dec 8, 2026). Both are proposals, not final rules.

Tokenized funds

Banks and asset managers increasingly treat public L1/L2 as settlement/distribution rails (BUIDL-style funds) while official books of record may remain off-chain.

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