Tokenized deposit
A digital token issued by a regulated bank that represents a customer deposit claim on that bank, carried on a blockchain ledger.
Also called: Deposit token
A tokenized deposit is a commercial bank deposit recorded as a token. It remains a liability of the issuing bank, sits on its balance sheet, and is generally covered by the same regulation, capital rules and, where applicable, deposit insurance as an ordinary deposit.
Unlike a stablecoin, which is backed by a segregated pool of reserve assets, a tokenized deposit is backed by the bank’s overall balance sheet and can be part of fractional reserve banking. Transfers usually occur on a bank-run or permissioned network, though some pilots use public chains with access controls.
Banks see tokenized deposits as a way to offer 24/7 programmable payments and settlement without giving up deposit funding to stablecoin issuers. Example: JPMorgan’s Kinexys platform (formerly Onyx) uses deposit tokens for intraday institutional transfers and in November 2025 launched its JPMD deposit token for institutional clients on Base, a public layer-2 network.
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Part of the BlockWest Glossary, plain-language definitions for markets, AI and digital assets. Educational content, not investment advice.