A tokenized deposit is a commercial bank deposit recorded as a transferable token on a blockchain, where each token is a direct claim on a specific bank's balance sheet rather than on a separate reserve pool. JPMorgan's JPM Coin (ticker JPMD) is the clearest live example: it represents dollars held on deposit at JPMorgan and went into institutional rollout on Coinbase's Base network on November 12, 2025. The token moves onchain, settles around the clock, and redeems back to a bank balance, but the underlying money never leaves the issuing bank's books.
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That balance-sheet detail is the whole point. It separates a tokenized deposit from a payment stablecoin like USDC, and it is the reason analysts spent late 2025 debating how to classify newer products such as SoFi's sofiUSD. This guide defines the category, walks through the mechanism, contrasts it with stablecoins, and shows where the line gets blurry, using JPM Coin and sofiUSD as the two reference cases.
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Fig 1. A tokenized deposit keeps the money on the bank's balance sheet while making the claim transferable onchain.
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A tokenized deposit is a digital token issued by a regulated bank that represents an existing deposit liability on that bank's balance sheet. Holding the token is functionally the same as holding money in a bank account, except the claim can move between parties on a blockchain. Because the deposit stays on the bank's books, it can carry deposit insurance and can pay interest, two features payment stablecoins generally cannot offer.
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The distinction comes down to what the token is a claim on. The Bank for International Settlements frames it cleanly in its 2025 bulletin on stablecoins and tokenised deposits: a tokenized deposit is a liability of the issuing bank, settled within that bank's ledger, while a stablecoin is a bearer claim on a pool of reserve assets held by a separate issuer. Brookings makes the same point in its explainer on payment stablecoins versus tokenized bank deposits, noting that tokenized deposits remain inside the regulated banking perimeter.
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That perimeter matters in the United States after the GENIUS Act, signed July 18, 2025. The law builds a federal framework for payment stablecoins, and it explicitly carves tokenized deposits out of that category. Under the statute, payment stablecoin issuers cannot pay yield to holders, while tokenized deposits keep the ability to pay interest and to inherit the issuing bank's deposit insurance. Same onchain wrapper, different legal object underneath.
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The category is small but no longer hypothetical. JPMorgan moved JPMD into live institutional use in late 2025, and a handful of other banks began piloting deposit-token settlement through 2025 and into 2026. These are not retail products yet. Most live tokenized deposits are restricted to KYC-verified institutional clients moving large balances between vetted counterparties.
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A tokenized deposit works by minting a blockchain token against a deposit already sitting in a customer's account at the issuing bank. When the customer wants money onchain, the bank locks or earmarks the deposit and issues an equivalent token; when the customer redeems, the bank burns the token and credits the account. The bank's ledger and the blockchain stay reconciled, so the token is always one-for-one with a real deposit liability.
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JPM Coin shows the full loop. According to JPMorgan's Kinexys documentation, an onboarded institutional client holds dollars at JPMorgan, the bank issues JPMD against those dollars, and the client can transfer the token to other whitelisted clients for near-instant, 24/7 settlement. Redemption back to U.S. dollars happens directly through JPMorgan at any time. The token is permissioned, meaning it only moves between parties the bank has onboarded.
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That permissioning is a defining mechanism. JPMD launched on Base on November 12, 2025 after trials with Mastercard, Coinbase, and B2C2, and access stayed restricted to JPMorgan's institutional clients such as corporations and pension funds. JPMorgan is also developing a euro-denominated version, JPME, pending EU regulatory approval. Public blockchain, private guest list.
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The settlement benefit is concrete. Traditional interbank dollar transfers run on Fedwire or correspondent banking, which clear during business hours and can take a full day for cross-border legs. A deposit token settles in seconds and runs continuously, so a treasury team can move balances between counterparties on a weekend without waiting for a banking window to open. The money stays bank money the entire time.
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Fig 2. The bank ledger and the blockchain stay reconciled, so each token always maps to a real deposit liability.
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The core difference between a tokenized deposit and a stablecoin is the claim. A tokenized deposit is a claim on a specific bank's balance sheet, so the holder is a depositor of that bank. A stablecoin is a claim on a segregated reserve pool held by an issuer, so the holder owns a slice of cash and short-term assets, not a bank deposit. That single distinction drives the differences in insurance, yield, and risk.
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Finovate lays out the balance-sheet split in its breakdown of tokenized deposits versus stablecoins: deposits stay on the bank's books and remain usable for lending, while stablecoin reserves sit off the bank's balance sheet. Elliptic's primer on tokenized deposits reaches the same conclusion, framing the deposit token as regulated bank money rather than a privately issued bearer instrument.
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The practical consequences fall along four axes: issuer, backing, insurance, and access. The table below summarizes how a tokenized deposit (JPM Coin), a payment stablecoin (USDC), and a hybrid case (sofiUSD) sit across those dimensions.
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Reserve scale gives a sense of how dominant the stablecoin model still is. As of Q1 2026, USDC supply sits near $76.6 billion and USDT near $189.3 billion (DeFiLlama), all of it reserve-backed and off any single bank's balance sheet. Tokenized deposits remain a fraction of that, concentrated in institutional settlement rather than open circulation.
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The two products most often cited in the 2026 tokenized-deposit conversation are JPMorgan's JPM Coin and SoFi's sofiUSD, though only the first is unambiguously a deposit token. JPM Coin is permissioned and bank-issued; sofiUSD is marketed as a stablecoin but sits close enough to the deposit line that analysts openly debate its classification. Looking at both shows where the category begins and where it gets blurry.
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JPM Coin is JPMorgan's USD deposit token, and the bank is explicit that it is not a stablecoin. JPMorgan's institutional newsroom post describes JPMD as a digital representation of a commercial bank deposit, available to institutional clients, settling 24/7 on a public blockchain. CoinDesk reported the Base rollout on November 12, 2025. It is the reference case for what a tokenized deposit looks like in production: bank money, permissioned access, onchain settlement.
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sofiUSD launched December 18, 2025, issued by SoFi Bank N.A., the first U.S. nationally chartered FDIC-insured bank to put a dollar token on a public, permissionless blockchain. SoFi's launch announcement calls it a "fully reserved stablecoin" backed 1:1 by cash SoFi Bank holds in its own master account at the Federal Reserve, deployed first on Ethereum with plans to expand. CoinDesk's launch coverage framed it as the first bank-issued stablecoin for enterprise payments.
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The label is contested precisely because SoFi is a bank. Finovate raised the question directly in a piece titled "SoFi Launches sofiUSD Stablecoin, But Could it Actually be a Tokenized Deposit?". The reasoning: when a chartered, FDIC-insured bank issues a token backed by cash at its own Fed account, the line between a reserve claim and a deposit claim narrows. SoFi's own framing keeps it on the stablecoin side, which means no yield to holders under the GENIUS Act, but the structural overlap with a deposit token is real. This guide does not resolve the debate; it presents both readings.
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Beyond these two, deposit-token activity through 2025 clustered around institutional pilots. JPMorgan's Kinexys unit ran the first USD-denominated deposit-token pilots before the JPMD rollout, per its Kinexys pilot announcement. The pattern across the wave is consistent: regulated banks, permissioned access, wholesale settlement, and a public blockchain used as a faster rail rather than an open market.
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The label matters because it changes the holder's legal position, the regulatory treatment, and the risk profile. A tokenized-deposit holder is a bank depositor with insurance and a claim on the bank. A stablecoin holder owns a reserve claim with no deposit insurance. The GENIUS Act formalizes this split, so the classification is not academic; it determines which rulebook applies and what protections attach.
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The Richmond Fed's GENIUS Act overview notes that payment stablecoins must hold 100% reserves and cannot pay yield, while tokenized deposits sit under existing banking rules and retain deposit-insurance eligibility. American Banker's argument that observers should not conflate the two rests on exactly this: conflating them misstates both the risk and the regulator.
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There is a systemic dimension too. When a customer buys a stablecoin, dollars leave the banking system and sit in an issuer's reserves, which can reduce the deposits banks lend against. Tokenized deposits keep the money inside the bank, so balances stay available for lending and liquidity management. That difference is why many banks favor the deposit-token model: it modernizes settlement without draining the deposit base that funds their core business.
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Most tokenized-deposit explainers stop at the single-chain mechanism, but the harder question is movement across chains. A deposit token issued on Base or Ethereum is only useful to a counterparty who can receive it where they operate, and institutions increasingly run across several networks. Moving bank money between chains without breaking the one-to-one link to the underlying deposit is the part TradFi explainers tend to skip.
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This is where stablecoin-and-deposit-token routing infrastructure becomes relevant. Eco operates cross-chain settlement rails that let dollar-denominated assets move between networks such as Ethereum, Base, and Solana with a single intent rather than a manual bridge-and-swap. For a token like JPMD on Base or a public-chain dollar token like sofiUSD on Ethereum and Solana, the routing layer is what turns a chain-bound deposit claim into something a counterparty on another network can actually receive and use.
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The point for a treasury or payments team is that the chain a deposit token launches on does not have to be the chain it settles on. The issuance and redemption stay with the bank, while the movement between networks happens on a routing layer built for stablecoin and tokenized-dollar transfers. That separation keeps the deposit claim intact while extending its reach across the chains institutions already use.
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No. A tokenized deposit is a claim on a specific bank's balance sheet and can carry deposit insurance and pay interest. A payment stablecoin is a claim on a separate reserve pool, has no deposit insurance, and cannot pay yield under the U.S. GENIUS Act. The onchain wrapper looks similar; the legal object underneath differs. See our breakdown of sofiUSD's classification.
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JPM Coin (JPMD) is a tokenized deposit, not a stablecoin. JPMorgan states it represents a commercial bank deposit at the bank, available to institutional clients and settling 24/7 on Coinbase's Base network since November 12, 2025. It is permissioned, so it only moves between JPMorgan-onboarded counterparties, unlike a permissionless stablecoin.
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SoFi markets sofiUSD as a fully reserved stablecoin backed 1:1 by cash SoFi Bank holds in its own master account at the Federal Reserve, not as a tokenized deposit. Because SoFi Bank N.A. is a chartered, FDIC-insured bank, some analysts argue it sits close to a deposit token. The classification is genuinely debated; SoFi's own framing keeps it on the stablecoin side. Our bank-issued stablecoins guide covers the wider landscape.
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Because a tokenized deposit is a claim on a bank's balance sheet, it is generally eligible for the same deposit insurance as the underlying account, subject to standard limits and the bank's structure. Payment stablecoins do not carry deposit insurance. The exact treatment depends on issuer setup and ongoing regulatory guidance under the GENIUS Act.
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Sources and methodology. Stablecoin supply figures pulled from DeFiLlama as of Q1 2026. JPM Coin and sofiUSD facts verified against JPMorgan and SoFi press releases and reporting from CoinDesk and The Block. Regulatory framing drawn from the GENIUS Act (signed July 18, 2025) and Federal Reserve and Brookings analysis. Figures refresh quarterly.
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For teams moving bank-issued dollars and stablecoins across networks, Eco provides the cross-chain settlement layer that routes dollar-denominated assets between Ethereum, Base, Solana, and other chains through a single intent, so a deposit token or stablecoin issued on one chain can settle where the counterparty operates. To understand how this category fits the broader shift to bank-issued digital dollars, see the pillar overview on how bank-issued stablecoins are reshaping digital payments.
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