Twelve of the largest U.S. banks announced on June 5 that they will build a shared tokenized deposit network through The Clearing House, targeting a first-half 2027 launch. The initiative — which includes JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, HSBC, PNC, and six others — represe...
"The banking industry has long provided the trusted infrastructure that underpins the movement of money throughout the global economy. The Clearing House is proud to help banks scale on-chain money movement by extending the safety, resiliency, and settlement certainty of regulated bank payment rails." — David Watson, President and CEO, The Clearing House
Twelve of the largest U.S. banks announced on June 5 that they will build a shared tokenized deposit network through The Clearing House, targeting a first-half 2027 launch. The initiative — which includes JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, HSBC, PNC, and six others — represents the banking industry's most coordinated response to the $315 billion stablecoin market. It is not an isolated move. A parallel consortium of five regional lenders is building a retail tokenized deposit network on ZKsync, twelve European banks have formed Qivalis to issue a MiCA-compliant euro stablecoin, SWIFT has piloted settlement on Ethereum's Linea Layer 2, and the BIS's Project Agorá has moved from prototype to real-value testing with 40+ financial institutions and seven central banks.
The pattern is unmistakable: traditional finance is no longer debating whether to use blockchain infrastructure. It is building its own, at speed, on terms designed to keep deposits — and the credit creation they fund — inside the regulated banking perimeter.
The June 5 announcement named 17 institutions: JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, BNY, HSBC, PNC, U.S. Bank, Truist, Santander, TD Bank, Regions Financial, BMO, Citizens Financial, Fifth Third, Huntington, and KeyBank, according to CoinDesk and The Clearing House reporting.
The Clearing House (TCH), a real-time payments company jointly owned by the participating banks, will operate the network. The platform will enable tokenized deposits to move instantly with 24/7 settlement capability, connecting traditional bank payment rails with blockchain infrastructure. TCH's product includes an on-chain clearing and settlement layer designed to function within existing banking regulatory frameworks, plus a connectivity layer linking blockchain activity to bank core systems and bridging to CHIPS and RTP.
Sal Karakaplan, chief strategy officer at The Clearing House, stated: "This initiative will give banks that are on the fence a reason to pursue tokenized deposits." The primary use case with the most traction, according to Watson, is "higher value movements around the world, particularly intercompany movements."
The stated objective is defensive. The GENIUS Act, currently advancing through Congress, could allow stablecoin issuers to pay yield to holders. If enacted, banks face a scenario where deposits — the raw material for credit extension — migrate to stablecoin wallets outside the banking system. Standard Chartered has estimated that $1 trillion in bank deposits across emerging markets could flow into stablecoins. The TCH network is designed to offer the same speed and programmability advantages of stablecoins while keeping funds inside the regulated deposit insurance framework.
While the TCH initiative targets wholesale and institutional use cases, five regional lenders — Huntington Bancshares ($225 billion in assets), M&T Bank ($214 billion), KeyCorp ($184 billion), First Horizon ($84 billion), and Old National Bancorp ($72 billion) — are building the Cari Network to address the retail side.
Cari selected Matter Labs' Prividium, a permissioned, privacy-preserving product built on ZKsync technology, as its blockchain infrastructure. The platform is designed to convert customer deposits into digital tokens that move instantly between institutions without funds leaving the banking system.
Timeline: Q3 2026 pilot, Q4 2026 customer-facing launch. The combined assets of the five founding banks total approximately $779 billion, according to CoinDesk reporting from March 2026.
The architecture choice is notable. By building on ZKsync's zero-knowledge proof stack rather than a proprietary chain, Cari gains Ethereum-grade security guarantees while maintaining the privacy controls that banking regulators require. It is a hybrid model — public blockchain security, permissioned access — that mirrors Deutsche Bank's approach with Project Dama 2.
Across the Atlantic, twelve European banks have formed Qivalis, a Netherlands-based entity, to issue a MiCA-compliant euro stablecoin. The consortium includes BNP Paribas, UniCredit, ING, BBVA, CaixaBank, Danske Bank, DekaBank, DZ BANK, KBC, Raiffeisen Bank International, SEB, and Banca Sella. Sir Howard Davies, former chairman of the UK Financial Services Authority, chairs the supervisory board.
Qivalis tapped Fireblocks as its core infrastructure partner in April 2026. Fireblocks will provide tokenization, treasury management, and lifecycle management capabilities using its ERC-20F standard — a token format designed for the permissioned access, compliance controls, and audit-ready reporting that MiCA demands.
The strategic logic is straightforward. Despite the stablecoin market reaching $314.68 billion as of June 2026, 99% remains dollar-denominated. Euro-pegged stablecoins represent just $650 million. The ECB's digital euro will not arrive before 2029 at the earliest, leaving a three-year window in which the only programmable, on-chain euro will be privately issued. Qivalis intends to fill that gap.
Reserves will be backed 1:1, with at least 40% held as bank deposits and the remainder in high-credit, short-term eurozone government bonds. The entity is pursuing an e-money license from De Nederlandsche Bank. Target launch: second half of 2026.
SWIFT, which connects over 11,000 financial institutions globally, chose Ethereum's Linea Layer 2 for its shared-ledger pilot. The project, which entered testing in late 2025, brought together more than 30 global financial institutions — including JPMorgan, HSBC, BNP Paribas, Deutsche Bank, and Bank of America — to explore how interbank messaging and settlement might operate on a public blockchain environment.
The pilot tested on-chain messaging and settlement flows using a stablecoin-like settlement token and interbank token transfers on Linea. The architecture combines messaging and settlement into a single layer, eliminating the multi-day reconciliation process that characterizes correspondent banking.
Linea, a zk-rollup network developed by ConsenSys, was selected for its low-cost, high-throughput transactions and data privacy through zero-knowledge proofs. The choice of a public Ethereum Layer 2 — rather than a private blockchain — signals a directional shift. SWIFT is not building a walled garden. It is building a permissioned layer on top of public infrastructure.
The Bank for International Settlements' Project Agorá, the largest BIS Innovation Hub project to date, delivered its prototype results in May 2026. Seven central banks — including the Federal Reserve Bank of New York, Bank of England, Bank of Japan, Banque de France, and Swiss National Bank — worked alongside 40+ regulated financial institutions including JPMorgan, HSBC, Deutsche Bank, UBS, SWIFT, and Mastercard.
The prototype demonstrated that tokenized commercial bank deposits can settle atomically alongside tokenized central bank reserves on a shared platform. The layered architecture allows each central bank to retain sovereignty over its national currency while enabling interoperable, multi-currency, 24/7 settlement.
According to the BIS press release of May 27, 2026, the project will now advance from simulations to real-value testing. The Bank of Canada has also joined as a participant.
The significance: Project Agorá validates the technical feasibility of a unified settlement layer where central bank money and commercial bank money coexist as programmable tokens. If deployed, it would compress cross-border payment settlement from days to seconds.
JPMorgan's Kinexys division provides a live proof of concept. JPM Coin (JPMD), a deposit token available to institutional clients, launched on Coinbase's Base network (an Ethereum Layer 2) and has since expanded to the Canton Network. Kinexys has processed more than $3 trillion in cumulative transactions since inception, averaging over $5 billion daily, according to JPMorgan's own reporting.
Naveen Mallela, global co-head of Kinexys by J.P. Morgan, stated: "JPM Coin delivers the security of bank-issued deposits and settlement, combined with the speed and innovation of 24/7, near real-time blockchain transactions."
Transfers on Base finalize within seconds because the token movement and JPMorgan's internal ledger update simultaneously. The token operates as a digital representation of a JPMorgan deposit — not a stablecoin, not a CBDC, but a tokenized claim on a commercial bank that retains FDIC insurance and existing regulatory protections.
This distinction matters. A tokenized deposit inherits the full regulatory framework of the issuing bank. A stablecoin does not. The Brookings Institution noted this structural difference in a 2026 analysis: unlike stablecoins, which are issued by a separate entity backed by reserve assets, tokenized deposits are governed by the same frameworks that apply to deposit-taking institutions.
The convergence of these initiatives around a 12-month window is not coincidental. Several pressures are forcing the banking sector's hand simultaneously:
Stablecoin growth. The stablecoin market cap reached $314.68 billion as of June 2026, up from $130 billion in early 2024. Two issuers — Tether ($186.35 billion, 59.2% dominance) and Circle ($74.89 billion, 23.8% dominance) — control 83% of supply.
Legislative risk. The GENIUS Act, if passed, would create a federal licensing framework for stablecoin issuers and potentially allow yield payments to holders. This would make stablecoins a direct substitute for savings deposits — not just a trading instrument.
Volume reality. After adjusting for trading activity, stablecoin payment flows reached approximately $390 billion in 2025, according to BIS data. That figure, while modest relative to the $2 quadrillion global payments market, is growing at a rate that banking incumbents cannot ignore.
Projection gap. Citi Institute projects that tokenized bank deposits could support $100–140 trillion in annual flows by 2030. The banks building these networks are positioning to capture that volume before stablecoin issuers do.
The underlying calculation: deposits fund approximately 70% of U.S. bank lending. If a meaningful share of deposits migrates to stablecoin issuers — who are not banks and do not extend credit — the fractional reserve banking model loses its funding base. The TCH network, Cari, Qivalis, and their counterparts are not technology experiments. They are existential defenses of the deposit-funded lending model.
Scale of coordination is unprecedented. At least 50 banks across three continents are building tokenized deposit or bank-issued stablecoin infrastructure simultaneously, using a mix of public Ethereum Layer 2s, ZK-proof chains, and permissioned shared ledgers.
The technology stack is converging on Ethereum. JPMorgan chose Base (Ethereum L2). Cari chose ZKsync (Ethereum L2). SWIFT chose Linea (Ethereum L2). Deutsche Bank's Dama 2 uses ZKsync. The institutional world is settling on Ethereum's security model, accessed through permissioned Layer 2 infrastructure.
Tokenized deposits and stablecoins are structurally different products. Deposits carry FDIC insurance, fund credit creation, and fall under banking regulation. Stablecoins do not. The contest is not about technology — it is about which wrapper holds the deposits.
The timeline is compressed. TCH targets H1 2027. Cari targets Q4 2026. Qivalis targets H2 2026. Project Agorá is moving to real-value testing. Within 12 months, multiple bank-operated tokenized payment networks will be live.
The $315 billion stablecoin market is the catalyst, not the competitor. Banks are not trying to destroy stablecoins. They are trying to prevent stablecoins from becoming the default programmable money layer — a role banks intend to fill themselves.
The banking industry is executing a coordinated infrastructure buildout that, in scope and speed, has no precedent in the blockchain sector. The numbers — 50+ participating institutions, seven central banks, three continents, multiple live pilots — describe an industry that has moved past experimentation into deployment planning.
The outcome is not predetermined. Stablecoin issuers have a multi-year head start, $315 billion in circulation, and the network effects that come with being the default settlement token in DeFi. Banks have regulatory standing, deposit insurance, and the credit creation franchise that underpins the modern financial system.
What is clear: the question of who holds the deposits — and on what rails they move — is now the central competitive question in financial infrastructure. The answer will be determined not by white papers or conference presentations, but by which networks achieve production-grade throughput, regulatory clarity, and end-user adoption first. That race is underway.