TLDR
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Regulators Favor Tokenized Deposits Over Stablecoins for Safer Digital Finance
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JPMorgan Backs Tokenized Deposits as Global Regulators Shift Focus
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Tokenized Bank Deposits Gain Ground as Stablecoins Face Scrutiny
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Safer, Stable, Regulated: The Rise of Tokenized Deposits Over Stablecoins
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Global Push for Tokenized Deposits Signals Stablecoin Challenges Ahead
Global financial regulators are increasingly favoring tokenized bank deposits over stablecoins, JPMorgan analysts stated in a recent report. The research emphasized that international regulatory bodies prefer digital money forms integrated within existing banking frameworks. This shift signals a broader move to maintain financial stability while embracing blockchain technology.
Regulators Favor Non-Bearer Tokenized Deposits
Global regulator are supporting tokenized deposits that retain core banking protections. These digital instruments offer interoperability with blockchain systems while maintaining deposit insurance and central bank support. Analysts noted that non-bearer tokenized deposits reduce systemic risk and preserve monetary uniformity.
JPMorgan: Regulators Outside the U.S. Favor Tokenized Bank Deposits Over Stablecoins@jpmorgan has released a report stating that regulators outside the United States—such as the Bank of England—generally prefer tokenized bank deposits over stablecoins. The analysis notes that… pic.twitter.com/zJxlVXp9H8
— MetaEra (@MetaEraHK) July 18, 2025
Non-bearer deposits settle transactions at face value between banks using central bank money, ensuring consistent value across systems. This approach maintains the “singleness of money,” a key principle in regulated financial environments. It also aligns with anti-money laundering and compliance rules, offering a secure digital alternative to cash.
The structure of non-transferable tokenized deposits minimizes volatility and credit risk exposure. Unlike stablecoins, they avoid price fluctuations and liquidity mismatches common in crypto markets. As a result, regulators see them as more reliable and suitable for long-term adoption.
Stablecoins Face Regulatory and Structural Challenges
Stablecoins remain widely used in the crypto market due to their liquidity and transfer speed. However, regulatory concerns persist regarding their stability, transparency, and integration with traditional financial systems. Recent market events involving Terra and FTX highlighted the risks of value deviation.
Short-term government securities or bank reserves generally back stablecoins. But under proposed rules, such as those in the UK, banks might hold non-interest-bearing central bank reserves for issued stablecoins. This structure reduces profitability and discourages banks from launching their coins.
JPMorgan analysts suggest stablecoins do not remove funds from the banking system entirely. Instead, reserves often remain within regulated finance through instruments such as Treasury bills. This weakens the argument that stablecoins are independent of traditional financial infrastructure.
JPMorgan Pilots Tokenized Deposit Solution
JPMorgan is actively exploring tokenized banking through its JPMD deposit coin on the Base Layer 2 network. The solution aims to provide secure, permissioned blockchain settlements while maintaining full integration with bank-backed assets. The bank filed a trademark for JPMD in June, targeting applications like cross-bank transfers and programmable payments.
The project supports the trend toward regulated digital money options that preserve the protections of the fiat system. JPMorgan’s initiative aligns with global regulators’ stance that supports transparency, safety, and operational resilience. The move highlights traditional finance’s efforts to control the transition to blockchain without compromising oversight.
While the U.S. considers policies like the GENIUS Act to permit bank-issued stablecoins, global authorities remain focused on preserving existing structures. JPMorgan’s findings reflect this divergence and suggest that tokenized deposits may lead to future developments in digital finance.
