Banking Industry Unveils Ambitious Blockchain Alliance

Thirty-nine US state banking associations have formed an alliance to launch an industry-owned blockchain network by 2027. The BankChain Alliance aims to support tokenized deposits, stablecoins, and automated payment settlement.

The alliance's interim chair, Kathy Kraninger, said the network is meant to be secure and regulated, allowing banks of all sizes to provide modern capabilities without having to build separate networks individually.

Tokenized deposits will represent liabilities of individual banks on a blockchain-based ledger, while stablecoins are separate tokens backed by reserve assets that can be issued by banks or other permitted entities.

The Federal Deposit Insurance Corporation (FDIC) has proposed treating eligible tokenized deposits consistently with conventional deposits. However, several key details about the BankChain network remain undecided, including its technology partner, ledger type, consensus mechanism, and cybersecurity framework.