Tokenised Deposits

Securities, fund units and receivables can now be held on a distributed ledger. The money that pays for them usually still sits in a bank's core banking system. Between the two, someone again has to reconcile and release. Tokenised deposits are the banks' answer to this gap. They bring the balance onto the ledger without turning it into a new form of money.

A Deposit Remains a Deposit

A tokenised deposit is a bank balance recorded on a ledger instead of in conventional account keeping. The holder has the same claim on the same bank as before. In its report of December 2024, the European Banking Authority (EBA) states that tokenisation does not change the nature of this claim. For supervisory purposes it remains a deposit. The rules for credit institutions apply, and deposit protection covers it under the same conditions as an ordinary account.

Two other forms of digital money are often mentioned in the same breath. A digital euro would be a central bank digital currency (CBDC), meaning central bank money and a claim on the Eurosystem. A euro stablecoin issued as an e-money token (EMT) is a claim on its issuer; MiCAR and the E-Money Directive apply to it. A tokenised deposit is neither. It remains commercial bank money.

The exemptions in the major regulatory frameworks show how much depends on this classification. The EU's Markets in Crypto-Assets Regulation (MiCAR) expressly does not apply to deposits, including structured deposits. A tokenised deposit therefore falls outside the regulation, as long as it is legally a deposit. Nor is it caught by the ban on interest that MiCAR sets for e-money tokens and asset-referenced tokens. The US GENIUS Act draws the same line. Under it, a bank deposit is not a payment stablecoin, expressly including a deposit recorded using distributed ledger technology. What both laws cover in detail is explained in MiCAR (EU) and USA – CLARITY Act & GENIUS Act.

What Sets It Apart from a Stablecoin

On the ledger, a deposit token and an e-money token from the same bank look alike. Both are claims on the bank, and both are redeemed at par. The EBA therefore calls the distinction difficult, even in conventional business between a non-interest-bearing sight deposit and e-money issued by a bank. It lists features that supervisors can use to assess each case. Three of them carry the difference.

The first is the account relationship. A deposit requires an ongoing contract between bank and client and belongs to the account holder. An e-money token, by contrast, belongs to whoever holds it; it is a bearer instrument. This leads to the second feature, transfer. The claim arising from a deposit generally cannot be passed on to a third party. When a client pays with a tokenised deposit, the claim on their own bank is extinguished and a new one arises at the recipient's bank. The settlement between the two banks follows, frequently in central bank money. An e-money token, on the other hand, moves from holder to holder, and the issuer's balance sheet changes only on redemption.

The third feature is the protection of the holder. A bank may pay interest on a deposit, and deposit protection covers it. MiCAR prohibits interest on e-money tokens, and deposit protection does not extend to them. The overview sets the three forms side by side:

What the digital euro is meant to do and how far the procedure has come is set out in Digital Euro (CBDC).

Three Routes Banks Are Taking

The simplest route is the ledger of a single bank. That is how the only live case is built that the EBA found in the European Economic Area (EEA) at the end of 2024. A credit institution keeps deposits and securities tokens side by side on its own permissioned ledger and settles them delivery versus payment. Responsibility and liability sit with one party. The benefit ends at the bank's boundary, though, because nobody outside it recognises the token.

The second route is a shared platform of several banks. The furthest advanced is Project Agorá, run by the Bank for International Settlements (BIS) together with the Institute of International Finance. It places tokenised central bank reserves next to tokenised commercial bank deposits, for payments across borders and currencies. On 27 May 2026 the BIS described the prototype. In July 2026, 28 financial institutions and central banks made payments in real money on it, totalling around 800,000 Swiss francs. Agorá is expressly not meant to be a finished product. It also examines how such tokens can comply with the rules on settlement finality, anti-money laundering and data privacy.

The third route leads onto a public blockchain. Since 12 November 2025, J.P. Morgan has offered its institutional clients a US dollar deposit token, JPM Coin (JPMD). It runs on Base, a layer 2 network on Ethereum that was built within Coinbase. Only the bank's clients can send and receive it. The token thus sits where other tokenised assets are already traded. In return, the bank has to handle access control, data privacy and anti-money laundering on a network that anyone can inspect.

Settlement between Banks

All three routes run into the same question: when is a payment between two banks final? For balances held in accounts, the Eurosystem's payment system T2 answers it in the euro area. For transactions on a ledger, there has been a link to it since 21 September 2026. Through Pontes, the Eurosystem settles transactions on DLT platforms in central bank money, and any institution with access to T2 can take part. The ECB intends to widen the eligibility of assets, participants and platforms step by step. How Pontes works and what it means for the choice of settlement asset is described in Settling Tokenised Securities: Stablecoin, Deposit or Central Bank Money.

A Valve Maker and Its House Bank

Suppose the house bank of a valve manufacturer offers tokenised deposits on its own ledger. The treasury uses them for deliveries from a brass foundry. The payment is set aside and released as soon as the ERP system posts the goods receipt. If the foundry holds its account at the same bank, this works as planned. The claim passes from one client to the other on the ledger, and the release depends on the event rather than on a payment run.

If the foundry banks elsewhere, the ledger ends at the bank's boundary. The house bank then transfers the money the conventional way. The condition in the token reaches only as far as the debit to the company's own account. The benefit therefore depends less on the house bank's technology than on how many business partners can be reached on the same ledger. If every bank offers its own system, payments fall apart into islands. The treasury would then have conditional payments for some suppliers and the usual payment run for the rest.

What the Treasury Clarifies First

For a CFO the questions to the bank are familiar; they simply sit in different places. The first concerns the claim itself: whether the bank issues the token as a deposit or as an e-money token. Since even the EBA calls the line difficult, the answer belongs in writing in the contract, with its consequences for interest and deposit protection. The second concerns finality. The treasury needs to know which booking counts, the one on the ledger or the one in the core banking system, and what applies if they differ.

The third question concerns operations. Paying on a ledger means working with wallets, keys and approvals instead of an online banking login. Roles, deputies and the loss of a key need rules before the first amount moves. Custody models and their liability are described in Custody & Safekeeping. On a public blockchain, visibility comes on top, because amounts and counterparties should not become readable for competitors. Finally, the purchase order number and invoice reference have to find their way from the token into the ERP system. Otherwise reconciliation brings back exactly the manual work the token was meant to save.

Two Designs from the Same Bank

A bank can bring the same balance onto a ledger as a deposit or as an e-money token. The two designs build their networks in different places. The e-money token is passed on and reaches as far as the wallets that accept it. The tokenised deposit stays with the account holder and reaches as far as the banks that settle with each other. Agorá and Pontes are building this link between banks. JPMD takes the other path: a deposit on an open network, but only among the bank's own clients. For a corporate client the difference remains tangible. With the deposit it keeps interest and deposit protection, with the e-money token it gains free transferability.