Banks are accelerating efforts to tokenize commercial deposits on blockchain infrastructure, positioning them as secure, regulated alternatives to stablecoins and central bank digital currencies. Tokenized deposits are direct liabilities of issuing banks, fully integrated into existing banking regulations including deposit insurance and AML/KYC protocols.
Lloyds Banking Group and Archax completed the UK’s first public blockchain transaction using tokenized deposits on the Canton Network. UK Finance’s pilot, testing peer-to-peer payments and digital asset settlement through mid-2026, includes Barclays, HSBC, and Quant.
Two-tier monetary system architecture. Source: RWA.io
Marko Vidrih of RWA.io emphasized that commercial bank money remains the backbone of global finance. Bringing it onchain is critical to the next generation of digital finance.
The European Central Bank is advancing its digital euro initiative with a pilot slated for late 2027. Its Appia roadmap introduces Pontes - a new settlement mechanism designed to connect blockchain platforms to the Eurosystem’s TARGET infrastructure, launching in Q3 2026.
Banks aim to retain control over payments and treasury services as digital cash instruments proliferate.