Tokenized deposits and deposit tokens

A tokenized deposit represents money a client already holds at a bank, moved onto a shared or private ledger so it can settle a trade or a payment the moment the ledger updates. The Finance Loop hub answer on tokenized deposits sets out the legal side: under EU law a tokenized deposit is still a deposit under the Deposit Guarantee Schemes Directive, covered up to EUR 100,000 per depositor and bank, and outside the scope of MiCA. A stablecoin, by contrast, is a bearer token that passes between holders and carries no deposit protection; the hub comparison of tokenized deposits and stablecoins lines up the two side by side.

Some banks call the same idea a deposit token. J.P. Morgan's Kinexys unit uses that name for JPM Coin, ticker JPMD, a USD deposit token that moved onto the Ethereum layer-2 network Base for institutional clients, after running first on J.P. Morgan's own private ledger (J.P. Morgan, Kinexys). Kinexys describes JPMD as digital USD backed by J.P. Morgan deposits, open to vetted institutional counterparties for payments, collateral and 24/7 cross-border transfers.

A bank chooses a deposit token when it wants the payment to stay a deposit: interest can be paid, the claim is bound to the account holder, and the bank's existing capital and liquidity rules apply without change. The Bank for International Settlements set out the difference in 2023: a deposit that keeps circulating inside the banking system and settles in central bank money is "more conducive to singleness" of money than a bearer token whose price can drift from par (BIS Bulletin 73). The European Central Bank made the same point in 2026, saying tokenized commercial bank deposits "carry the credit quality of regulated institutions" and may suit wholesale settlement better than stablecoins for many use cases (ECB, May 8, 2026). Andréa Maechler, Deputy General Manager of the Basel-based Bank for International Settlements, argued for deposits in her speech How deposits can harness tokenisation at the Singapore Fintech Festival: tokenization can carry the strengths of the existing banking system into a programmable world, and the monetary system has to keep up with the technology without losing trust in money.

In Germany, the banking industry body Deutsche Kreditwirtschaft has worked since 2023 on a shared Commercial Bank Money Token (CBMT), and the project reached its first live transfers between banks. Deutsche Bank, Commerzbank, DZ Bank, UniCredit and Helaba ran the pilot together with industrial clients including Siemens, Evonik, BASF, Mercedes-Benz and Airplus, and a pre-production sandbox followed to prepare the token for regular use. Corporates, not other banks, are the intended users: a company pays a supplier in CBMT and the receiving bank settles the transfer without the payment leaving the regulated banking system.

The Deutsche Bundesbank in Frankfurt built its own bridge between the Eurosystem payment system T2 and DLT platforms, called the Trigger Solution. On November 7, 2024, Deutsche Bank and UBS used it to settle fictitious corporate payments between the two banks with tokenized deposits (Deutsche Bundesbank, November 29, 2024). UBS separately ran a multi-currency pilot of UBS Digital Cash for corporate and institutional clients (UBS, November 7, 2024). In its Monthly Report article Digital money: options for large-value payments in central bank money, the Bundesbank counts tokenized deposits among the fields that received far less attention in the Eurosystem's DLT trials, where securities and derivatives took most of the work.

The use cases the European Banking Authority found in its 2024 survey of banks are settlement of securities trades and payment for goods, both delivery versus payment on a ledger. J.P. Morgan's Kinexys names the same jobs for JPMD: posting collateral for securities transactions, programmable payment execution, and cross-border transfers that run around the clock instead of only during banking hours. The token settles near-instantly and reconciles automatically with the bank's own books, which is the main reason a treasury team looks at it instead of a standard wire.

Finance Loop is the meeting place for treasury, payments and DLT teams who compare tokenized deposits with stablecoins and CBDCs. Venturebloxx and Finance Loop are preparing the institutional report The Future of Money in Europe, with J.P. Morgan Kinexys, Commerzbank and Monerium among the contributors on how banks compete with stablecoin issuers. The Digital Euro Conference in Frankfurt covers commercial bank money tokens next to CBDCs and stablecoins. The London Blockchain Finance Summit, which Finance Loop cooperated with, held deep dives on tokenized deposits in production, and at Capital & Code in Frankfurt, where Finance Loop is media partner, the Bundesbank, J.P. Morgan and Ubyx debate central bank money against deposits, tokenized deposits and stablecoins. Finance Loop also lists tokenization events in Germany, where the eWpG and bank pilots such as CBMT come up alongside securities tokenization.

Yes, banks use the two names for the same idea: a bank deposit recorded on a ledger. J.P. Morgan calls its product a deposit token (JPMD); European regulators and the EBA generally write tokenized deposit. Both stay a claim on the issuing bank and keep the ordinary deposit protection.

Tokenized cash is a looser term some banks use for any ledger-based representation of money held at a bank, including tokenized deposits. It does not describe a separate legal category: whether a specific token is a deposit, an e-money token or something else depends on the claim behind it, not the name a bank gives its product.

Yes, as ordinary bank deposits. MiCA excludes deposits from its scope, so a tokenized deposit stays under the CRD, the CRR and national banking law, with BaFin supervising German banks and the FMA supervising Austrian banks. The full comparison with e-money tokens is on the hub answer on tokenized deposits.