US banks to build tokenized deposit network by 2027 vs USDC/USDT
US banks including JPMorgan Chase, Bank of America, and Citigroup plan a joint tokenized deposit network via The Clearing House, targeting launch in 1H 2027. The tokenized deposit network will move regulated bank deposits on blockchain rails and support 24/7 settlement, with the digital token representing a bank liability that stays inside the banking system.
The initiative is framed as a response to stablecoin pressure. Circle’s USDC and Tether’s USDT dominate on-chain cash for crypto trading and cross-border payments. Banks fear customers could shift funds from bank accounts into crypto wallets, pressuring “core deposits.”
A Jefferies estimate cited in the article projects stablecoins could drive 3%–5% deposit runoff over five years and cut average bank earnings by about 3%. Traders may see near-term sentiment swings around USDC/USDT, while the longer-term risk is demand rotation toward bank-backed tokenized rails for corporate payments and treasury operations rather than crypto-native stablecoin settlement.
Bearish
This news is positioned as a bank-backed alternative to stablecoins. By launching a tokenized deposit network with 24/7 settlement, banks aim to keep funds inside the regulated system, which could reduce the need for USDC/USDT as “on-chain cash” for certain corporate payments and treasury workflows. That framing can weigh on USDC/USDT sentiment in the short term. Longer term, if adoption grows, it may divert some stablecoin usage away from crypto-native rails.
However, the article also suggests competition rather than a direct shutdown of stablecoin markets. So the likely effect on USDC/USDT price is more sentiment/usage-risk related than an immediate liquidity break, keeping the overall stance bearish but not extreme.