Tokenised Deposits Explained: JPMorgan, Citi, HSBC and Regulators

In September 2025 Ant International's treasury team moved US dollars from Hong Kong to Singapore through HSBC, and the transfer settled as a token on the bank's own ledger, on a service built for instant settlement around the clock. No stablecoin was involved, no exchange and no crypto wallet. The dollars were HSBC deposits throughout, simply represented in a form that could move around the clock. It was the first cross-border payment on HSBC's Tokenised Deposit Service, and a small example of what the largest banks think the on-chain dollar should look like.

What a tokenised deposit is, and is not

A tokenised deposit is an ordinary commercial bank deposit recorded as a token on a distributed ledger. The holder has exactly the same claim as any other depositor: an unsecured claim on the bank, covered by the bank's capital, liquidity rules and deposit insurance where it applies. The bank can lend against it, as it does with any deposit. The token changes how the money moves, not what it is.

A stablecoin is a different instrument. The issuer, usually not a bank, holds a separate pool of reserves in cash and short-term government debt, and the token is a claim on that pool. The issuer may not lend the reserves out. In the US, the GENIUS Act makes that segregation a legal requirement for payment stablecoins.

That middle row is the whole policy argument. Because tokenised deposits keep the bank's ability to lend, central bankers see them as preserving the link between deposits and credit. Stablecoins that grow by pulling deposits out of banks weaken it. Our comparison of stablecoins, CBDCs and tokenised deposits goes deeper into the trade-offs.

JPMorgan Kinexys: the largest by far

JPMorgan launched JPM Coin in 2019, renamed its blockchain unit Onyx and then, in November 2024, Kinexys. At the rebrand the platform was processing about $2 billion a day, with payment transactions up 1,000% year on year, Decrypt reported. By January 2026, JPMorgan's disclosures put daily volume at $2 billion to $3 billion and cumulative volume above $1.5 trillion since 2019, according to reporting on the bank's Canton announcement.

Two moves in the past year matter. On 12 November 2025 JPM Coin became available to institutional clients on Base, Coinbase's public layer-2 network, with B2C2, Coinbase and Mastercard among the first users. That put a bank deposit token on a public chain for the first time at this scale, though access remains limited to approved clients. Then, on 7 January 2026, Kinexys and Digital Asset said JPM Coin would launch natively on the Canton Network, in phases through 2026, starting with issuance, transfer and near-instant redemption. Corporate users include BMW, which uses Kinexys for automated treasury transfers.

Citi Token Services: seven markets

Citi launched Citi Token Services for cash in 2024, aimed at its corporate and institutional clients. In November 2025 the bank said the service was processing billions of dollars, was live in the US, UK, Singapore and Hong Kong, and was adding euro transfers from Dublin, per its announcement. On 30 September 2026 it added Japan, for US dollars, and the UAE, for dollars and euros, bringing the network to seven live markets, Crowdfund Insider reported.

Citi's design choice is telling. Clients do not need new accounts or crypto wallets; they instruct transfers through existing banking channels and the tokenisation happens inside the bank. The ledger is plumbing, not a product. That makes adoption easy for treasurers and closes off the open-network use that crypto advocates care about.

HSBC: from Hong Kong to London

HSBC rolled out domestic tokenised deposit payments in Hong Kong and Singapore in 2025, then on 18 September 2025 announced cross-border transfers, starting with Ant International's dollar payment, and extended the service to the UK and Luxembourg for domestic payments in sterling, euros and dollars, according to Treasury Today. HSBC disclosed no volumes.

In the UK, HSBC, NatWest and Lloyds ran a UK Finance pilot using tokenised deposits for online marketplace payments in 2025, with the big lenders planning to offer tokenised customer deposits in 2026, as Reuters reporting carried by Malaya described. HSBC's executives said the strongest client demand was cross-border, where correspondent banking still imposes cut-offs and delays covered in our correspondent banking explainer.

Volumes in context

It is easy to dismiss bank tokens as pilots. The numbers say otherwise. Kinexys at $2 billion a day, if it ran every day of the year, would process about $730 billion annually. Genuine stablecoin payments, stripping out trading and internal transfers, were estimated at around $390 billion in 2025 by McKinsey and Artemis. Visa's USDC settlement with banks had reached a $3.5 billion annualised run rate by November 2025.

The comparison is imperfect. Kinexys volume is largely intragroup and interbank liquidity movement for JPMorgan clients, not commerce, and the bank has not published how much is one company moving its own money between accounts. Stablecoin supply, about $306 billion as of October 2026, is also a stock rather than a flow. But on payment value, bank tokens are already in the same league as stablecoins, concentrated in a handful of institutions. For more on the stablecoin side, see our stablecoin market report.

Worked example: the Friday-evening sweep

Here is where tokenised deposits earn their keep. The interest rate below is an illustrative assumption. A consumer electronics group has $40 million of surplus dollars in its Hong Kong subsidiary at 7pm on a Friday, and its Singapore subsidiary must fund a $40 million supplier payment that would otherwise be covered by an overdraft until Monday.

• Conventional route. Payment systems are closed. The Singapore entity borrows $40 million for three days. At an assumed 6% annual overdraft rate, that costs $40,000,000 x 6% x 3/365, about $19,700, plus the internal cost of managing the gap.
• Tokenised deposit route. If both entities bank with the same institution on a 24/7 tokenised service, the treasury moves $40 million between them in seconds on Friday evening. The overdraft is not needed.
• Annualised. A treasury facing that gap on 40 weekends a year would spend roughly $790,000 on overdrafts it could avoid.

The catch is in the condition: both entities must bank with the same institution, or with banks whose ledgers interoperate. That is the binding constraint on tokenised deposits today. Treasurers should model their own banking structure and take advice from a qualified adviser before changing liquidity arrangements.

A tokenised deposit is only as useful as the number of other banks it can reach.

What regulators think

Central banks have been unusually direct. The BIS, in its June 2025 Annual Economic Report, argued that stablecoins fall short as money on three tests (singleness, elasticity and integrity) and that the future lies in a unified ledger combining tokenised central bank reserves, commercial bank money and government bonds, as The Full FX summarised. Tokenised deposits are the commercial bank money in that picture.

Bank of England Governor Andrew Bailey went further in July 2025, telling The Times he would prefer banks pursue tokenised deposits rather than issuing their own stablecoins, and observing that the US was moving toward stablecoins and the ECB toward a CBDC, "neither" toward tokenised deposits, The Block reported. The Bank has said UK banks can experiment with tokenised deposits within existing rules.

The BIS's own experiment is Project Agora, launched on 3 April 2024 with seven central banks and more than 40 private financial institutions coordinated by the Institute of International Finance. Its prototype, delivered on 27 May 2026, showed tokenised commercial bank deposits and tokenised central bank reserves could settle atomically on a shared platform, across currencies, according to Deutsche Bank's flow. It used synthetic transactions only and left resilience, throughput and core-banking integration untested. The stakes are large: cross-border payment flows were about $195 trillion in 2024, about 91% of them wholesale, the same source notes. See also our explainers on wholesale CBDCs and Project mBridge.

What to watch next

• JPM Coin on Canton, through 2026: the phased launch will show whether a deposit token can work across a network that includes other large institutions.
• UK tokenised deposits in 2026: whether HSBC, NatWest, Lloyds and others move from marketplace pilots to live customer deposits, and how that sits alongside the FCA's stablecoin regime, expected to be finalised around the end of 2026.
• Project Agora's next step: the BIS has signalled live transactions, potentially in real-world environments, after the May 2026 prototype.
• Citi's network: further markets after Japan and the UAE, and any disclosure of volumes beyond "billions".
• US rules: the GENIUS Act takes effect by January 2027 at the latest. How US bank regulators treat deposit tokens on public chains, compared with bank-issued payment stablecoins, will shape which model US banks choose. Our piece on stablecoins and bank deposits follows that argument.

Tokenised deposits are less exciting than stablecoins and more important than they look. They are already moving hundreds of billions of dollars a year inside a few banks. Their weakness is the same as their strength: they stay inside the regulated banking system, and they will only rival stablecoins as a general payment instrument once banks agree to let their tokens talk to each other.

About this researchMuffinPay InsightsIndependent analysis of stablecoins, CBDCs, cross-border payments and digital public infrastructure. Every figure is linked to its source. Read our editorial standards →