The Eurosystem is bringing central bank money into tokenised financial markets, marking a significant step toward connecting traditional central-bank infrastructure with blockchain-based finance. The initiative focuses on enabling central bank money to be used in transactions involving tokenised assets. This could help bridge existing financial-market infrastructure with emerging distributed-ledger systems. For banks and capital-markets firms, the development is particularly relevant to the broader shift toward tokenised securities and digital settlement. It also shows how central banks are increasingly engaging directly with the infrastructure underpinning tokenised finance.
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Tokenized Money for Banks
Banks have been issuing tokenized money for the better part of a decade, but those products were primarily tokenized deposits on private networks. Regulation has since cleared a path for tokenized money on public networks, giving financial institutions more options to serve the growing institutional demand.
In most cases, tokenized money at banks means private-ledger products that never left the bank’s network. JPMorgan, Citibank, HSBC, and others tokenized deposit liabilities on infrastructure they controlled. Each served wholesale payments between vetted institutional clients and stayed inside the perimeter. The customer relationship was preserved, and the regulatory uncertainty was small.
Outside the bank perimeter, stablecoins emerged as an alternative form of tokenized money. They moved more than $300 billion in payment volume over the past year. Visa settles over $7 billion in stablecoin card volume annually, across multiple blockchains and stablecoins. Trade XYZ, an institutional perpetual venue, has cleared $100 billion on the S&P 500 perpetual since March 2026, all settled in stablecoins.
The GENIUS Act and Basel SCO60 now give banks a clear rulebook for issuing tokenized money, including stablecoins, on public networks. Banks can serve this emerging demand with tokenized deposits, first-party stablecoins, or third-party stablecoins. Each carries a different trade-off across the deposit franchise, interoperability, and liquidity ratios. Most banks will end up needing more than one.
Three families of tokenized money
Banks have three main options for tokenized money, each with different balance-sheet effects and market reach.
Tokenized deposits
A regular bank deposit represented as a token. The money stays on the bank’s books and can earn interest, but transfers are limited to approved counterparties. JPMD on Base is a live example.
First-party stablecoins
A stablecoin issued by the bank and backed by segregated reserves. The customer holds a redemption claim rather than a bank deposit. This is more capital-intensive but gives the bank control over a 24/7 settlement asset.
Third-party stablecoins
A stablecoin issued by someone else. The bank helps customers convert funds, which then leave its balance sheet. The benefit is the broadest reach across public blockchain venues, including crypto derivatives markets.
No model is universally best. The right choice depends on the bank’s clients and where they settle.
Tokenized deposits protect the deposit franchise but have limited reach. First-party stablecoins create a bank-controlled settlement rail but change the liability profile under Basel rules. Third-party stablecoins provide the broadest liquidity access but move the customer claim outside the bank.
A hedge fund may use tokenized deposits for margin, third-party stablecoins for weekend hedging, and a consortium stablecoin for rebalancing. A bank offering only one option cannot fully serve that client.
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