The Future of Digital Money: Stablecoins vs. Tokenised Deposits
3-Point Summary
- Stablecoins and tokenised deposits look similar, but their scalability and regulatory paths diverge sharply.
- Global banks are adopting tokenised deposits as programmable, regulated forms of commercial bank money.
- As capital markets move on-chain, tokenised deposits are emerging as the preferred settlement layer.
Stablecoins and tokenised deposits may appear similar, but their roles in the future of digital money are diverging fast.
50-Second Shorts Video
Watch this 50-second overview to understand why tokenised deposits are becoming the core layer of digital money.
Stablecoins vs Tokenised Deposits: How Digital Money Is Finding Its Real Foundation
The conversation around digital money has shifted. For years, the focus was on which technology would disrupt traditional finance – blockchain, cryptocurrencies, or decentralised alternatives. As we move into 2026, a different story is emerging: incumbent financial institutions aren’t being disrupted, they’re upgrading.
At the centre of this shift are two models of digital money: stablecoins and tokenised deposits. They may look similar on the surface, but in terms of scalability, regulation and integration with the existing financial system, they are moving in very different directions.
1) Stablecoins today — growth without full-scale adoption
Stablecoins have grown into a market worth hundreds of billions of dollars, yet real-world usage remains heavily concentrated in crypto trading and speculative activity. For most enterprises, adopting stablecoins is still a major operational lift.
- Requires overhauling treasury, accounting and compliance systems
- Offers limited advantages over mature, efficient payment rails in developed markets
- Is not commercial bank money, so comes with regulatory and liquidity uncertainties
In practice, stablecoins have proven useful in specific niches, but they face structural barriers to becoming the core layer of large-scale financial infrastructure.
2) Tokenised deposits — the digital money model banks are choosing
Tokenised deposits take a different approach: instead of creating new money-like instruments outside the banking system, they transform existing commercial bank deposits into blockchain-based, programmable forms.
Leading global banks are already moving in this direction:
- JPMorgan: JPMD deposit token on Base for institutional clients
- HSBC: tokenised deposits for cross-border flows between Hong Kong and Singapore
- BNY Mellon: exploring tokenised deposits to modernise a $2.5 trillion-per-day payments infrastructure
Because tokenised deposits remain on bank balance sheets, they inherit the regulatory, liquidity and risk frameworks of traditional deposits, while enabling automated cash management, conditional payments and other programmable financial services.
3) Stablecoins vs tokenised deposits — structural differences that matter
Both stablecoins and tokenised deposits function as digital money, but they differ fundamentally in issuer, liability structure, blockchain environment and settlement design. These differences are exactly what drive institutional preference.
① Issuer and liability structure
● Stablecoins
- Issued by non-bank entities (e.g. Circle, Tether)
- Backed by short-term government securities and cash-like assets
- Tokens are claims on the issuer’s balance sheet, with no deposit insurance
→ The issuer’s risk profile directly becomes the token’s risk profile.
● Tokenised deposits
- Issued by regulated commercial banks
- Backed by actual bank deposits
- Tokens remain inside the bank’s balance sheet, subject to deposit insurance and banking rules
→ They carry the same legal and prudential status as traditional deposits, in digital form.
② Blockchain environment — openness vs regulatory control
● Stablecoins
- Primarily issued on public chains such as Ethereum, Solana, Tron
- Benefit from open access and global liquidity
- Face challenges around AML/KYC, governance and regulatory oversight
● Tokenised deposits
- Typically run on permissioned or bank-operated networks
- Embed compliance, auditability and access controls by design
- Optimised for interoperability between regulated financial institutions
→ Public chains maximise openness; permissioned networks maximise regulatory control and operational assurance.
③ Payment and settlement design
● Stablecoins
- On-chain transfer, but ultimate settlement depends on the issuer’s off-chain reserve management
- On-chain assets and off-chain financial systems remain structurally separated
→ Difficult to serve as the foundational settlement layer for large-scale financial infrastructure.
● Tokenised deposits
- Payment and settlement occur within the banking system
- Bank ledgers and blockchain ledgers can be synchronised for near real-time settlement
- When combined with tokenised securities, enable true on-chain Delivery versus Payment (DvP)
→ On-chain assets and on-chain money can operate within a single, integrated system.
④ Risk profile summary
| Risk type | Stablecoins | Tokenised deposits |
|---|---|---|
| Liquidity | Dependent on issuer’s reserve management | Subject to banking liquidity rules and deposit protection |
| Credit | Issuer credit risk | Bank credit risk within a regulated framework |
| Operational | Public chain congestion and fee volatility | Controlled, permissioned infrastructure |
| Regulatory | Fragmented and evolving across jurisdictions | Anchored in existing banking regulation |
→ For institutions, tokenised deposits align more naturally with existing risk, capital and compliance regimes.
4) When capital markets go on-chain — why tokenised deposits become pivotal
In the second half of 2026, major market infrastructures are rolling out large-scale tokenisation of real-world assets. Equity indices, government bonds and ETFs are moving on-chain, bringing high-liquidity instruments into programmable environments.
In that world, the payment leg matters as much as the asset leg. Tokenised deposits are emerging as the preferred settlement asset for these tokenised markets, because they combine:
- On-chain programmability
- Regulated bank money as the underlying asset
- Compatibility with existing payment and risk frameworks
This is where the real transformation happens: assets and money meeting natively on-chain, not as an experiment at the edge, but as an upgrade to core financial infrastructure.
5) Conclusion — and a brief question about the future
Stablecoins will likely remain important in specific use cases, especially in crypto-native markets and cross-border niches. But their structural limitations make it hard for them to become the primary settlement layer of the global financial system.
Tokenised deposits, by contrast, are: scalable, regulation-friendly, and naturally integrated with existing banking and market infrastructures. They are rapidly positioning themselves as a foundational layer for digital money.
As multiple models of digital money evolve in parallel, the openness of stablecoins and the institutional robustness of tokenised deposits point toward different futures.
Which of these two trajectories will carry more weight in shaping tomorrow’s financial system?
Taking a moment to reflect on that question may make the future of digital money feel a little clearer.
Younchan Jung
Researcher exploring structural shifts in AI, blockchain, and the on‑chain economy.
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