Digital Money Takes Shape with Three Emerging Models: Stablecoins, Tokenized Deposits, and CBDCs
The concept of digital money is rapidly evolving, and it's no longer confined to a single model. Three distinct approaches are emerging: stablecoins, tokenized commercial-bank deposits, and central bank digital currencies (CBDCs). Each has its own strengths and weaknesses, and they serve different purposes in the world of finance.
Stablecoins have grown into a massive market, with a global market capitalization of $314 billion. They're designed to track assets like the US dollar, allowing for easy movement around public blockchains. However, stablecoins don't automatically function like ordinary bank money and can trade at different prices in secondary markets.
Tokenized deposits take a different approach by representing conventional commercial-bank deposits on programmable infrastructure. This method preserves monetary 'singleness,' ensuring that one unit of bank money remains redeemable at par with another. Tokenized deposits could support faster settlement, automated compliance, and digital transactions while keeping banks within the financial system.
The strongest evidence for tokenized banking infrastructure comes from Project Agorá, a BIS initiative that brings together eight central banks and over 40 regulated financial institutions to test tokenized commercial-bank deposits. In July 2026, real-value tests were conducted across 17 scenarios, demonstrating atomic cross-border settlement using real monetary value.
CBDCs represent direct central-bank liabilities rather than claims on private issuers or commercial banks. A BIS survey found that 91% of 93 central banks surveyed are exploring retail CBDCs, wholesale CBDCs, or both. Europe is targeting potential technical readiness for a digital euro by 2029.
The future of digital money may involve a layered system where stablecoins provide open-network payments, tokenized deposits support regulated banking, and CBDCs anchor settlement. However, the decisive challenge will be making these systems interoperable without sacrificing liquidity, financial stability, or monetary sovereignty.