Related Reading JPMorgan just put JPM Coin bank deposits on Base – and beat the Fed to 24/7 settlement Both the Federal Reserve and the Bank for International Settlements have separately identified the same mechanism, tying stablecoin-driven deposit migration to higher funding costs and, eventually, loan repricing.
Tolkachev said:
“This is a fight over the cheapest liability in the system, and the cost of credit is downstream of who wins it.”
Wells Fargo announced plans in early August to launch tokenized deposits for corporate and commercial clients this fall, starting with USD-to-GBP transactions before expanding further in 2027.
The bank says the product will carry the same regulatory protections and deposit-insurance eligibility as its existing deposit products.
JPMorgan already runs JPM Coin as a deposit token on the Base blockchain, letting institutional clients move money and post collateral on public rails while the underlying balance stays a commercial-bank deposit.
Step What changes Why it matters 1. Customer money leaves deposits Cash moves from bank deposits into stablecoin reserves Banks lose cheap, sticky funding 2. Bank replaces funding Wholesale or market funding fills the gap Replacement funding is typically more expensive 3. Margins compress Net interest margin comes under pressure Lending becomes less profitable 4. Credit reprices Banks charge more or tighten standards Borrowers feel the impact downstream 5. Banks respond Tokenized deposits offer programmable money without losing deposits The product becomes defensive, not just innovative Which side of the balance sheet wins the next few years Tolkachev said that a stablecoin still makes more sense for money that needs to move, cross-border, around the clock, into onchain settlement or between counterparties instantly.
A bank deposit still makes more sense for money that needs to sit, with insurance, a lending relationship and a balance sheet behind it.
He said:
“Most treasurers will use both, matched to the job.”
Tolkachev also warned that a bank deposit comes with a lender assessing risk and a regulator watching the reserves behind it. A stablecoin hands over a dollar without that machinery, which is why it moves faster and why a treasurer should check the collateral behind it before trusting the yield on it.
The bull case has large banks building interoperable tokenized-deposit networks that keep corporate treasury balances inside bank rails, adding 24/7 programmable settlement without giving up the underlying funding.
In that scenario, tokenized deposits become the banking industry's real answer to stablecoins, matching the technology while keeping the deposit base that funds their lending.
Use case Stablecoin advantage Tokenized deposit advantage Cross-border payment Fast, 24/7, easier onchain movement Strong if bank networks become interoperable Corporate treasury reserves Less natural unless funds need to move quickly Better fit for money that needs to sit with a bank relationship Onchain settlement Stronger current interoperability Useful where counterparties accept bank deposit tokens Collateral movement Fast and composable Strong for regulated institutional workflows Cash-like holding Depends on reserve quality and redemption confidence Backed by bank balance sheet, supervision, and deposit treatment The bear case has even a modest 1% to 3% move out of US commercial-bank deposits, worth roughly $195 billion to $586 billion against the current $19.5 trillion deposit base. That capital moves into stablecoins faster than tokenized deposits can hold the line.
Under that path, funding costs rise first, margins compress, and loan repricing follows. The market is starting to treat stablecoins as a genuine threat to the liability side of bank balance sheets, well beyond their current reputation as a payments product alone.
Banks are building tokenized deposits because stablecoins proved what a programmable dollar can do for customers. The fight now underway is over which side of the transaction gets to keep the money while it waits.
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