JPMorgan & DBS Put Chips on Deposit Tokenization For Cross-Bank Payments

World’s leading financial institutions, JPMorgan on one side of the Atlantic and DBS on the other, have announced a blockchain-based tokenization framework to facilitate cross-bank payments in the years to come.

This will enable 24/7 instant payments between the JPMorgan and DBS deposit token ecosystems and empower both their clients to exchange or redeem tokenized deposits whenever they want.

A New Digital Payment Standard

The new system, currently in development, has the potential to radically shift the paradigm on bank-to-bank payments. Their new blockchain‑based framework enables tokenised bank deposits to move instantly across institutions 24/7. What’s more, it applies to both public and permissioned chains.

In practice, that means a corporate client at JPMorgan can send a deposit token to a DBS client, who can either redeem it for cash or hold it in their token ecosystem. No more waiting days for settlement, no reliance on legacy payment rails.

They are not the outliers in this push for tokenization, either. According to a 2024 survey from the Bank for International Settlements (BIS), about a third of commercial banks are exploring tokenised deposit projects. This collaboration looks like one of the first attempts to turn a pilot into scale.

Is Tokenized Finance the Future?

Tokenized deposits, digital bank‑issued tokens representing actual deposits rather than private crypto tokens, are moving from concept to reality fast.

The appeal is more than clear. Tokenization of deposits combines the regulatory safety of traditional bank deposits with the speed, flexibility, and programmability of blockchain technology. In simple terms, transactions that once took days through legacy banking systems can now settle almost instantly, all while staying fully within regulated frameworks.

No wonder that BlackRock, the world’s largest asset manager with over $10 trillion in capital, also banks on tokenization of traditional assets like bonds and stocks.

Unlike privately issued stablecoins such as USDT or USDC, tokenised deposits are backed by commercial banks and governed by existing banking rules. What that does is reduce counterparty risk, give institutions peace of mind, and ensure regulators are already watching closely. At the same time, the blockchain layer adds programmability, meaning payments, settlements, or even automated treasury functions can be coded directly into the token itself. Music to the ears of big money clients.

What About Stablecoins?

Stablecoins aren’t disappearing anytime soon. They remain popular in crypto and fintech ecosystems for retail and DeFi applications. Due to their immutable nature, they also remain a go-to solution for crypto gambling in all its forms.

But for institutional cross‑border payments, the bank‑issued token model could be a game-changer. CFOs, treasurers, and payment operations teams now have a path to near-instant settlement, global interoperability, and trust anchored in regulated banks.

And if a financial heavyweight like JPMorgan‑DBS delivers on their plan, it’s more than an upgrade; it’s a re‑laying of the rails for global banking by blending the reliability of banks with the innovation of blockchain.

Stablecoins Still Pack a Punch

Meanwhile, Citigroup has recently partnered with Coinbase to enable faster fiat-to-crypto exchange, making it potentially the first major Wall Street bank to offer cross-border crypto transactions. If it comes to bear palpable fruit, the partnership should speed up fiat-to-crypto exchanges for institutional clients by leveraging Coinbase’s blockchain infrastructure and regulatory experience.

Visa, too, is testing the use of stablecoins as pillars for cross-border payments. The card company has launched a pilot project test run with select clientele, which, rather than keeping large fiat balances across multiple countries, are asked to pre-fund their Visa Direct transactions using stablecoins.

In this scenario, businesses can use stablecoins like USDC or EURC for global payouts, liquidity management, and smoother cross-border operations.