Analysts Identified Risk of Tokenized Deposits for Credit Availability

Published: August 28, 2026 – 11:44 UTC

U.S. banks are considering tokenized deposits as a potential alternative to stablecoins.
Experts have examined how tokenized deposits could affect lending.
In their view, such a product could weaken banks’ ability to lend to businesses and households.

U.S. banks are actively exploring tokenized deposits as an alternative to stablecoins, but their widespread adoption could reshape the structure of bank funding and reduce lenders’ ability to transform short-term liabilities into long-term loans. This is stated in an analysis by the Federal Reserve Bank of Dallas.

The authors noted that tokenization could increase deposits’ sensitivity to interest rates, accelerate outflows, and force banks to hold more liquid assets.

Tokenized deposits differ from stablecoins in that they exist within the current banking system and can generate interest income for holders. At the same time, they are still less convenient for transfers between different banks. For large-scale adoption, deposit tokens would need to circulate beyond the issuing institution, so banks are already considering consortium-based models and shared networks.

As a reminder, the largest U.S. banks, including JPMorgan, Citigroup, Bank of America, and Wells Fargo, have planned to launch a tokenized deposit network in the first half of 2027.

Tokenization Could Change Bank Lending

Traditionally, banks use relatively stable deposits to fund long-term loans. However, instant transfers of tokenized deposits could significantly simplify customers’ switching between banks in search of higher yields.

An additional factor could be the development of agentic AI and smart contracts. In theory, they would make it possible to automate the movement of funds between banks without the direct involvement of the depositor.

According to the authors’ estimates, about 80% of the banking sector’s asset duration, equivalent to roughly $5.8 trillion on a 10-year basis, is supported by deposit characteristics. Therefore, a change in depositor behavior could directly affect banks’ ability to finance long-term assets.

In particular:

A 10% reduction in the average deposit lifespan could reduce maturity transformation capacity by about $580 billion;
A 10% increase in deposit rate sensitivity could reduce banks’ willingness to take on interest rate risk by about $700 billion in 10-year equivalent terms
To maintain lending volumes, banks may be forced to rely more on term debt, potentially raising borrowing costs for households and businesses

Banks May Need More Liquidity

Tokenized deposits could also push banks to increase their holdings of high-quality liquid assets. Instant fund transfers increase the volatility of deposit balances and make outflows harder to forecast.

In such conditions, banks may increase the share of reserves and government bonds in their liquid portfolios to respond faster to potential outflows.

Some conclusions can be drawn from Brazil’s experience, where the Pix instant payments system has been operating since 2020. By Q1 2026, it had around 200 million active users, and monthly transaction volume reached roughly $650 billion.

A study based on regulatory data found that more active Pix usage increased banks’ demand for liquid assets, including government bonds, while also reducing credit intermediation. Within the remaining loan book, banks increased the share of higher-risk loans, seeking to boost returns and use capital more efficiently.

Composition of bank assets and loans based on Central Bank of Brazil data under low and high instant payment usage. Source: Federal Reserve Bank of Dallas.

The authors emphasize that tokenized deposits in the US are still at an early stage of development, so the scale of future effects remains uncertain. At the same time, the continued spread of tokenization, stablecoins, tokenized securities, and money market funds could significantly reshape the payment system and how banks operate.

Separately, regulators will need to assess how these changes affect monetary policy, different types of banks, and the central bank’s role as lender of last resort in a financial system where a significant share of deposits becomes digital and instantly transferable.

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Source: Incrypted