Short positioning
Tokenized deposits remain two-tier money: central bank money for final settlement and commercial bank money for day-to-day business. The key challenges are interoperability across banks and robust settlement / finality when multiple platforms and jurisdictions are involved.
Definition & Distinction
The term "tokenized deposits" is not always used consistently in practice. For this article, the following working definition applies:
Tokenized Deposit = a tokenized claim on a bank deposit (balance) at a specific commercial bank. The token is a digital proof that a certain amount is held as a deposit and can be converted back into "traditional" bank money (account credit) according to the bank's rules.
It is important to clearly distinguish from two other forms of digital money that are often mentioned together:
- Euro Stablecoin as E-Money Token (EMT): A stablecoin is a separate token issued by an issuer whose value is pegged to the euro. An EMT is legally typically e-money, not a bank deposit.
- Digital Euro (Central Bank Digital Currency, CBDC): A digital euro would be central bank money in digital form. Tokenized deposits, on the other hand, are commercial bank money.
The practical value of this distinction: Companies should not discuss "good or bad", but understand which type of money is actually used in a process – and what consequences this has for liquidity, risk, compliance and integration.
Why banks offer tokenized deposits at all
Tokenization is not an end in itself. Banks are driving tokenized deposits because more and more value flows are moving towards programmable infrastructure.
As soon as assets (e.g. securities, fund units, receivables or supply chain assets) are traded or managed on a DLT platform, a familiar problem arises in a new form: The asset is on-chain, the money remains off-chain. In traditional capital markets, this media break is "bought" through intermediaries, coordination processes and time. In a tokenized process world, it seems like a step backwards.
Tokenized deposits are the bank-native attempt to close this media break – without changing the economic logic of the two-tier monetary system. In other words: Banks want to make bank money available in such a way that it acts as "natively" in DLT processes as a token, without companies having to accept a new form of money.
This leads to a second motive that is particularly relevant for corporate customers: process integration. When payment triggering, approval, delivery events and documentation are orchestrated digitally anyway (ERP, workflow), payment becomes a "building block" in the process – not an external follow-up.
Three technical paths emerging in practice
In discussions, tokenized money often sounds like a uniform product. In fact, there are several architectural paths that differ significantly in maturity, benefits and risks.
| Path | Brief description | Strengths | Typical limitations |
|---|---|---|---|
| 1) Single-Bank Token | A bank represents deposits as tokens in its own DLT or API ecosystem. | Quick to implement, clear responsibility, good for company-specific use cases within a banking relationship. | Benefits often limited if payment partners do not use the same bank; interoperability is not "automatic". |
| 2) Multi-Bank Approach (Shared Ledger / CBMT logic) | Multiple banks issue tokenized deposits on a shared infrastructure (or interoperable ledgers). | Potential for network effects, broader acceptance, industry-suitable scaling. | Governance, standardization and settlement issues are complex; many initiatives are still in pilot or consortium phases. |
| 3) Deposit Token on Public Blockchain | Tokenized deposits are made available on a public blockchain/Layer-2 (usually only for institutional clients). | High programmability, fast integration into existing DLT ecosystems, 24/7 settlement possible. | Privacy/transparency, compliance implementation and partner capability must be solved very cleanly; not every use case fits on public networks. |
An important addition: Many tokenized deposits are described as "better stablecoins". This is too short-sighted. Tokenized deposits are more of an attempt to modernize bank money, while stablecoins often emerge as parallel digital payment infrastructure.
Settlement: Why "central bank money" becomes important again with tokenized money
Payment and settlement is not just about speed, but also about finality: When is a transaction final, irrevocable and balance-sheet reliable?
In traditional markets, finality is linked to established infrastructures (e.g. TARGET services in the euro area). In DLT environments, two new questions arise:
- How is payment made "final" in DLT processes?
- How is risk managed when multiple banks, platforms or countries are involved?
Therefore, two building blocks reappear in many projects:
- Tokenized central bank approaches / Wholesale DLT settlement: Settlement in central bank money, but in DLT-compatible form.
- Bridges between DLT platforms and existing settlement systems: Particularly relevant in the euro context, because a large part of industrial payment flows remains linked to traditional infrastructure.
For medium-sized companies, the technical detail question is less decisive than the classification: Tokenized deposits become truly "industry-compatible" when they not only work in a single bank island, but are systemically connectable – i.e. with final settlement, clear liability and reliable compliance processes.
What companies are specifically interested in
Tokenized deposits are particularly exciting where processes are already digitized and increasingly automated – i.e. precisely in the world where ERP systems, data exchange via data spaces as well as cross-border payments and international treasury management are gaining importance.
1) Settlement of tokenized assets (Delivery-versus-Payment)
When an asset is traded in tokenized form, it makes sense to design the payment so that asset transfer and payment logically coincide.
Tokenized deposits can be a bank-native option to embed payments in DLT workflows without the company relying on a separate stablecoin issuer.
2) Programmable B2B payments
Many industrial processes follow clear events: goods receipt, quality release, milestone, service delivery. In tokenized payment logic, releases, limits or escrow mechanics can be mapped more precisely – not as a "gimmick", but as an extension of the internal control system.
3) Treasury and liquidity management
When settlement becomes available 24/7, planning and liquidity disposition change – especially in international supply chains. Tokenized deposits are potentially interesting here because they remain closer to traditional treasury models than some stablecoin setups.
4) Data and audit capability
In many approaches, the token is not just "money", but also a technical anchor for documentation: references, IDs, hashes, approval protocols. This can facilitate reconciliation and auditing – if it is cleanly translated into ERP processes.
Comparison: Tokenized Deposit vs. Euro Stablecoin vs. Digital Euro
This comparison is intended as a guide. In a specific project, the question that ultimately decides is: Which money fits which process – and which risk preference?
| Feature | Tokenized Deposit | Euro Stablecoin (EMT) | Digital Euro (CBDC) |
|---|---|---|---|
| Issuer | Commercial bank | E-money institution or bank (depending on model) | Central bank/Eurosystem |
| Type of money | Commercial bank money | E-money / tokenized money of an issuer | Central bank money |
| Objective | Integrate bank money into DLT processes | Digital euro value carrier on blockchain | Digital central bank money |
| Interest possible? | Potentially yes (as with deposits, depending on product/model) | Usually no (e-money is not interest-bearing) | Politically/design-dependent, mostly limited |
| Network effect | Strongly dependent on interoperability between banks | Strongly dependent on acceptance of the respective token/rails | Dependent on rollout and usage model |
| Typical hurdle | Standardization + settlement connection | On-/off-ramps + issuer due diligence | Timeline, mandate, design decisions |
Risks, limitations and open questions
Tokenized deposits seem "simple" at first glance because they build on existing bank money. In practice, however, the challenging topics lie at the edges.
1) Interoperability and network effects
A token is only as useful as the network in which it is accepted. If every bank sets up its own token system, fragmentation threatens. Multi-bank approaches are therefore important, but organizationally demanding.
2) Legal classification and protection mechanisms
The central question is not whether a token technically exists, but what claim stands behind it: redeemability, insolvency scenarios, ranking, availability of deposit insurance. Precisely here, precision is more important than marketing.
3) Settlement risk and finality
When tokenized deposits are used across bank or platform boundaries, it must be clear when a payment is final and which system ultimately holds "the truth". Without reliable settlement connection, part of the efficiency promises remain theoretical.
4) Privacy and transparency
Public blockchains bring observability. Institutional solutions must therefore serve privacy, confidentiality and auditability simultaneously. This is solvable, but not trivial.
5) Operational risk (Key management, roles, recovery)
Tokenized deposits act like "bank money", but are often operated like digital assets: wallets, keys, signatures, whitelists. This shifts operational risks into areas that many companies have not yet established today.
Orientation questions for decision-makers
Instead of a "start checklist" (too early), a structured due diligence lens often helps. The following questions are deliberately neutral – they are intended to facilitate conversations with banks, service providers and internal stakeholders.
| Area | Questions that create clarity |
|---|---|
| Product & claim | What exactly does the token represent (deposit, claim, e-money)? How does redemption work? Is there interest logic? |
| Network & partner capability | Does the product only work within one bank? How are payments to other banks processed? Are there standards or consortia? |
| Settlement & finality | Where is the final booking – in the DLT ledger, in the core banking system, in the settlement system? How are deviations handled? |
| Compliance | How are KYC/AML obligations mapped? How is the travel rule logic implemented when service providers are involved? |
| Integration | Which APIs exist? How are references (Invoice, PO, Hash) transferred into ERP processes? How does reconciliation work? |
| Operations & resilience | Who holds keys? What roles/approvals exist? What do emergency and recovery processes look like? |
Classification: Where the topic is likely to land in the next few years
Tokenized deposits are a plausible component of a more digital monetary system – especially in the European context, where banking relationships, regulation and deposit insurance play a major role.
At the same time, it is realistic that the first implementations will begin selectively: in selected bank ecosystems, in DLT settlement processes for tokenized assets or in clearly limited corporate treasury flows.
For the DACH SME sector, a sober perspective is therefore helpful: Tokenized deposits are less a "new form of money", but rather a modernization path for existing bank money – with the long-term goal of making payments and settlement in digital process chains simpler, faster and better integrable.
Sources & Status
Status: 20.02.2026
Sources (selection):
- European Banking Authority (EBA): Report on Tokenised deposits (PDF, 30.12.2024)
- EBA: Press Release zum Report (12/2024)
- Deutsche Kreditwirtschaft (GBIC): Working paper on Commercial Bank Money Token (CBMT) (PDF, 03.07.2023)
- Bank for International Settlements (BIS): Project Agorá (Projektseite, aktualisiert 14.10.2025)
- Europäische Zentralbank (EZB): Press Release zu Pontes (01.07.2025)
- EZB/Eurosystem: Exploratory Work „DLT settlement in central bank money" (2024)
- J.P. Morgan Payments Newsroom: Kinexys pilots first USD-denominated deposit tokens (24.06.2025)
- J.P. Morgan Payments Newsroom: First bank issues USD deposit token on a public blockchain (12.11.2025)
- J.P. Morgan / Kinexys: Produktseite JPM Coin (JPMD)