Tokenized Deposit
A tokenized deposit is a commercial bank deposit recorded as a token on a programmable or distributed ledger. It remains a direct claim on the issuing bank, with the same legal status as an ordinary deposit at that bank.
Also called: tokenised deposit · deposit token · tokenised bank deposit · tokenized commercial bank money
The Bank for International Settlements describes tokenized deposits as digital representations of commercial bank money on a programmable platform, giving the holder a direct claim on the issuing bank and redeemable at par. Only the record changes. The liability is still a deposit, on the bank's balance sheet, subject to its regulation and capital requirements, and, where the deposit protection scheme covers it, protected as an ordinary deposit would be.
That is the difference from a stablecoin. A stablecoin is a liability of a separate issuer, backed by a pool of reserves, and passes from holder to holder without the issuer's involvement. Its price in secondary markets can move away from par, especially under stress. A tokenized deposit is designed to keep what the BIS calls the singleness of money: in the target models, transfers between banks settle in central bank money, so one bank's dollar token is always worth one dollar at any other bank.
The appeal is programmability and settlement around the clock: a deposit token can move against a tokenized security in one step, or pay automatically when a condition is met. The limit is reach. A deposit token is useful only where the counterparty can hold it, and in 2026 most schemes run on permissioned platforms operated by one bank or a small group, with little interoperability between them.
For a payments business, the question to ask of any token is whose liability it is. Moving on a distributed ledger does not make an instrument better money; the issuer, the settlement asset and the legal claim decide that.
In practice
Whether a token is legally a deposit depends on how it is issued and on national law. A token issued by a non-bank, or one backed by a separate pool of assets, is not a tokenized deposit.
Learn more on Money Wiki
This page gives the short answer. Money Wiki has a longer guide to Tokenized Deposit, with more detail and background.
Commonly confused with
| Term | How it differs |
|---|---|
| Stablecoin | A stablecoin is a liability of a separate issuer backed by reserve assets, and can trade off par. A tokenized deposit is a bank deposit itself, a direct claim on the bank, recorded in token form. |
See also
- StablecoinA stablecoin is a crypto-asset designed to hold a steady value against a reference, almost always a fiat currency such as the US dollar. How that steadiness is supported differs sharply from one issuer to the next, and so does what a holder can actually redeem.
- Commercial Bank MoneyCommercial bank money is the money that exists as deposits at commercial banks. It is a private bank's promise to pay, created when banks lend, and makes up the large majority of the money that households and businesses actually use.
- TokenizationTokenization means representing an asset, or a claim on one, as a transferable token recorded on a ledger. The token is a record of entitlement; whether legal ownership of the underlying asset moves with it depends on the contract and the governing law, not on the ledger.
- CBDCA CBDC, or central bank digital currency, is digital money issued by a central bank and held as a claim on that central bank. It is not a privately issued stablecoin, and it is not the commercial bank money already moving through payment systems.
- Central Bank MoneyCentral bank money is money that is a direct liability of the central bank: banknotes and coins, and the balances that commercial banks hold in their accounts at the central bank. It carries no credit risk and is the safest settlement asset.
- Tally StickA tally stick was a notched wooden stick, split lengthways into two matching halves, used by the English Exchequer from the twelfth century to 1826 to record payments and debts. Only the original halves fitted together, which made forgery difficult.