Banks favor tokenized deposits over stablecoins to retain balance-sheet control
Banks are adopting tokenized deposits while treating stablecoins as a separate, riskier category of digital money. Tokenized deposits repack existing bank liabilities on blockchain rails without creating new money, preserving capital, liquidity rules, deposit insurance and supervisory visibility. Stablecoins, by contrast, are typically non-bank liabilities backed by reserve portfolios and sit outside traditional prudential and insurance frameworks, shifting settlement liquidity outside regulated balance sheets. The article argues banks support tokenization because it upgrades settlement speed and programmability but keeps liabilities within the regulated perimeter, reducing issuer risk and consumer burden. Industry experts expect regulatory clarification in 2026 and emphasize infrastructure gaps — chiefly digital identity and verifiable credentials — must be closed to scale on-chain settlement safely. For advisors and traders, the takeaway is that tokenized deposits align on-chain efficiency with legal certainty, while stablecoins remain subject to legal and regulatory uncertainty and therefore different risk profiles.
Neutral
The article signals a structural shift rather than an immediate market-moving event. Banks’ push for tokenized deposits reduces systemic risk associated with non-bank stablecoins by keeping liabilities on regulated balance sheets; that supports longer-term confidence in on-chain bank money but does not directly change crypto price mechanics. In the short term, traders may see neutral-to-mixed effects: positive for regulated tokenization projects and infrastructure tokens tied to institutional rails, but potentially negative for private stablecoin issuers facing competitive and regulatory pressure. Historically, regulatory clarity and bank adoption pathways (e.g., announcements around custody, tokenized assets or bank-backed stablecoins) have led to measured institutional inflows and improved market sentiment, supporting assets tied to settlement infrastructure while exerting pressure on unregulated stablecoins. Over the long term, widespread tokenized deposits could increase on-chain liquidity and reduce counterparty risk, which is bullish for crypto markets’ utility and institutional participation—but only if identity, compliance and legal frameworks mature. Therefore the immediate market read is neutral with selective sector upside (infrastructure, institutional rails) and downside pressure for unbacked or regulatory-vulnerable stablecoin projects.