Banks Unite Against Stablecoins: Blockchain Rails for Corporate Deposits

Major US banks JPMorgan, Bank of America, Citigroup, and Wells Fargo are working together to create a blockchain-based system for corporate deposits, known as tokenized deposits. This move is in response to the growing popularity of stablecoins, which have been attracting corporate cash with their speed and flexibility.

The Clearing House, a bank-owned payments company, will operate this new system, targeting large multinational companies as its first users. Tokenized deposits will offer a faster rail for corporate cash while maintaining the same regulatory treatment as ordinary deposits.

Regulatory changes, such as the GENIUS Act, have provided a framework for payment stablecoins, but the CLARITY Act is still facing opposition due to concerns over yield-like products that may resemble bank deposits.

JPMorgan has already launched its JPM Coin USD deposit token, JPMD, on Base and Canton Network, while Citigroup has been building Citi Token Services for instant cross-border payments. The shared Clearing House network will provide a common platform for the largest banks to meet.