Banks Turn to Tokenized Deposits for Faster Cross-Border Payments

Financial institutions are working on tokenized deposits to simplify cross-border payments. This technology allows banks to record deposits as digital tokens, making it easier for companies to move money between countries.

The first example of this in action was when DBS and Citi's New York office completed a dollar payment between Singapore and the US in minutes on September 5th. To achieve this, they used SWIFT's digital ledger to record the tokenized deposits.

This technology is seen as a lucrative opportunity for banks to compete with other financial providers that offer similar services. Companies pay banks to convert currencies and arrange loans, but if another provider offers a better way to hold and move money, banks could lose these fees.