Seventeen U.S. and international banks have committed to building a shared tokenized deposit network through The Clearing House (TCH), targeting a first-half 2027 launch. The consortium — led by JPMorgan, Bank of America, Citigroup, and Wells Fargo — represents the banking sector's most coordinat...
"This is a big move for the banks. We are heading toward a radically different future, one centered on blockchain-based payments." — David Watson, CEO, The Clearing House
Seventeen U.S. and international banks have committed to building a shared tokenized deposit network through The Clearing House (TCH), targeting a first-half 2027 launch. The consortium — led by JPMorgan, Bank of America, Citigroup, and Wells Fargo — represents the banking sector's most coordinated competitive response to a stablecoin market that now exceeds $320 billion in circulating supply.
The initiative operates alongside two parallel developments: a separate regional bank tokenized deposit network (Cari Network) targeting Q4 2026, and Visa and Mastercard expanding stablecoin settlement across their card networks. Together, these moves mark a structural shift in how dollar-denominated digital value will flow through the financial system. The question is no longer whether tokenized money will replace legacy payment rails, but which form — bank-issued deposit tokens or non-bank stablecoins — will dominate institutional and commercial flows.
The CLARITY Act, which cleared the Senate Banking Committee 15-9 on May 14, 2026, adds urgency. The American Bankers Association estimates that if yield-bearing stablecoins are permitted, the stablecoin market could expand from $300 billion to $2 trillion — with deposits draining directly from bank balance sheets. Tokenized deposits are the banking industry's hedge against that scenario.
The Clearing House — co-owned by its member banks and already the operator of CHIPS and RTP, which collectively process over $2 trillion daily — announced on June 5, 2026, that it will build a tokenized deposit settlement network. The platform, internally referred to as "the bridge" or "the chain," would convert traditional bank deposits into blockchain-based tokens that settle instantly, around the clock.
The 17 committed banks:
| Tier | Banks | |------|-------| | Big Four | JPMorgan Chase, Bank of America, Citigroup, Wells Fargo | | Global | HSBC, Santander, TD Bank, BMO, BNY Mellon | | Regional/Super-Regional | PNC, Truist, U.S. Bank, Citizens Financial, Fifth Third, KeyBank, Regions Financial, Huntington National Bank |
Key technical capabilities include on-chain clearing and settlement, programmable controls (escrow, delivery-versus-payment, spend restrictions), and interoperability with TCH's existing CHIPS and RTP rails. The blockchain vendor has not yet been selected.
Target users are large multinational corporations seeking programmable treasury operations, real-time liquidity management, and cross-border payment functionality. According to reporting by PYMNTS, TCH expects these corporates to use tokenized deposits as a gateway to always-on cash management.
Bank of America's head of enterprise payments Mark Monaco acknowledged that clients are not yet "beating down the door" for tokenized deposits, but emphasized the need for banks to build infrastructure before demand materializes. Citi's Shahmir Khaliq described the initiative as "another step that effectively cements" banks' role in financing and capital markets.
Several participants are not waiting for the TCH network. Individual bank tokenized deposit products are already operational:
JPMorgan (JPMD): The bank launched its deposit token, JPMD, on Coinbase's Base network for institutional clients. JPMD is the first commercial bank deposit product deployed on a public blockchain. The token represents dollar deposits held at JPMorgan, is redeemable through the bank's infrastructure, and can pay interest to holders. JPMorgan plans to expand with a euro variant (JPME) and additional blockchain networks, pending regulatory approval.
BNY Mellon: In January 2026, BNY launched a tokenized deposit service on a private permissioned blockchain. Initial participants include ICE, Citadel Securities, DRW Holdings, Ripple Prime, Baillie Gifford, and Circle. BNY holds $57.8 trillion in assets under custody. ICE plans to integrate the tokenized deposits into its clearing houses to support preparation for 24-hour trade settlement.
Citigroup (Citi Token Services): Citi's token platform integrates with its 24/7 USD Clearing solution, enabling multibank cross-border instant payments. The system supports active transactions for more than 250 banks across over 40 markets. Citi is also building out a crypto custody service slated for 2026 rollout.
The proliferation of individual bank tokens underscores the core challenge that TCH's network aims to solve: interoperability. A JPMorgan deposit token that only works within JPMorgan's ecosystem has limited network value. The TCH network would enable interbank movement of tokenized deposits — the functional equivalent of what ACH and wire transfers do for traditional deposits today.
Mid-size and regional banks are pursuing their own tokenized deposit infrastructure rather than waiting for the TCH network. The Cari Network, built on ZKsync layer-2 technology using Matter Labs' Prividium platform, includes Huntington Bancshares, First Horizon, M&T Bank, KeyCorp, and Old National Bancorp.
Timeline: Q3 2026 pilot, Q4 2026 customer-facing launch — six months ahead of TCH's projected date. The network will initially handle intra-network transfers between member bank customers.
The architectural choice is notable. While TCH has not selected a blockchain vendor, Cari has committed to Prividium, a privacy-focused infrastructure built specifically for regulated institutions. This suggests regional banks are prioritizing speed-to-market and regulatory compliance over waiting for the larger consortium to set standards.
There is participant overlap: Huntington and KeyBank are committed to both Cari and TCH. This dual participation indicates that banks view the two networks as complementary rather than competing — Cari for near-term regional use, TCH for longer-term institutional and cross-border settlement.
While banks build deposit token networks, the card networks are embedding stablecoins into their existing infrastructure — a parallel track that creates a distinct competitive dynamic.
Visa: The network's stablecoin settlement pilot now supports nine blockchains and has reached a $7 billion annualized settlement run rate, up 50% since the prior quarter. In April 2026, Visa added Arc, Base, Canton, Polygon, and Tempo to its settlement infrastructure. In June 2026, Visa announced a collaboration with Brale to explore private stablecoin-based settlement using the Canton Network — notably, the same blockchain that TCH's member bank Citi uses for its token services.
Mastercard: In June 2026, Mastercard expanded its settlement capabilities to include regulated stablecoins across eight blockchains: Arbitrum, Base, Canton, Ethereum, Polygon, Solana, Tempo, and XRPL. Supported stablecoins include Circle's USDC, Paxos-issued stablecoins (PYUSD, USDG, USDP), Ripple's RLUSD, and SoFi's SoFiUSD. Early adopters include ARQ (formerly DolarApp), CBW Bank, Cross River, Lead Bank, and Nuvei in the U.S. and Latin America.
The card networks' approach is pragmatic: they are settlement-layer agnostic. Visa and Mastercard will settle in whatever form of digital dollar their participants prefer — stablecoin or, eventually, tokenized deposit. This positions them as infrastructure that benefits regardless of which digital dollar format prevails.
The stablecoin market has grown from $229.2 billion in April 2025 to over $320 billion by mid-2026, a 40% increase in 14 months. Market structure remains concentrated: Tether (USDT) at $186.8 billion and USDC at $75.8 billion together account for 93% of circulating supply.
Stablecoins' competitive advantages over tokenized deposits are straightforward: they already exist at scale, operate on public permissionless infrastructure, and are accessible to any participant without bank account requirements. Their disadvantage: they sit outside the insured deposit perimeter, lack the regulatory equivalence of bank liabilities, and — depending on the final text of the CLARITY Act — may face restrictions on yield distribution.
The ABA's estimate that yield-bearing stablecoins could grow the market to $2 trillion represents the banking industry's worst-case planning scenario. Whether that figure materializes depends entirely on the CLARITY Act's final yield provisions and how regulators interpret "economically or functionally equivalent" to bank deposit interest.
The CLARITY Act cleared the Senate Banking Committee 15-9 on May 14, 2026. The bill's stablecoin yield provision is the legislative fulcrum driving both the bank tokenization push and the stablecoin industry's expansion ambitions.
The compromise language, negotiated by Senators Thom Tillis and Angela Alsobrooks, bans stablecoin yield that is "economically or functionally equivalent" to interest-bearing bank deposits, while permitting "bona fide activity" rewards. In practice, this means stablecoin issuers must restructure reward programs from a "buy and hold" model to a "buy and use" model — rewards tied to transaction activity rather than passive holding.
Banking trade groups, led by the ABA, continue to argue the language contains exploitable loopholes. The bill's passage odds — tracked at approximately 48% on prediction markets as of late June — remain uncertain, with opposition from both banking lobbies and, separately, Catholic bishops' groups who argue Section 604's non-custodial developer provisions could weaken anti-money-laundering safeguards.
| Feature | Tokenized Deposits (TCH/Cari) | Stablecoins (USDT/USDC) | |---------|-------------------------------|------------------------| | Issuer | Commercial banks | Non-bank issuers (Tether, Circle) | | Regulatory status | Bank liability, existing framework | New regulatory category (CLARITY Act pending) | | FDIC insurance | Eligible | Not eligible | | Yield/interest | Can pay interest (bank product) | Restricted under CLARITY Act compromise | | Network access | Permissioned (banks and verified clients) | Permissionless (public blockchains) | | Settlement | TCH rails + blockchain | Native blockchain | | Current scale | Early stage (BNY, JPMorgan live) | $320B+ circulating supply | | Interoperability | TCH interbank network (2027) | Multi-chain, multi-platform | | 24/7 operation | Yes (planned) | Yes (operational) | | Programmability | Escrow, DVP, spend restrictions | Smart contract-native |
The comparison reveals a trade-off between regulatory safety and market accessibility. Tokenized deposits offer institutional comfort — same risk profile as traditional deposits, same regulatory treatment, FDIC eligibility — but require participants to operate within the banking system. Stablecoins offer open access and composability with DeFi infrastructure but carry issuer credit risk and regulatory uncertainty.
The U.S. financial system is building two parallel digital dollar infrastructures simultaneously. Banks are tokenizing deposits to preserve their position as the core intermediary in dollar flows. Stablecoin issuers are scaling a non-bank alternative that already exceeds $320 billion in circulation. Card networks are positioning as settlement-agnostic infrastructure that will serve both.
The economic stakes are quantifiable. TCH's member banks sit on trillions in deposits. The ABA's $2 trillion stablecoin growth estimate — whether accurate or lobbying rhetoric — frames the scale of potential deposit displacement. The CLARITY Act's final yield provisions will determine whether stablecoins can offer passive returns competitive with bank accounts, or are restricted to activity-based rewards that limit their appeal as deposit substitutes.
What is clear from the data: tokenized deposits are not a speculative concept. They are live at JPMorgan, BNY Mellon, and Citi. They are six months from customer-facing deployment at Cari. They are 12 months from interbank settlement at TCH. The infrastructure is being built. The question that remains is whether 17 banks and $2 trillion in daily settlement volume can overcome a $320 billion stablecoin market's head start in user adoption, developer tooling, and global accessibility.