Banks Move into Blockchain

Banks are showing growing interest in so-called tokenized deposits. These are digital representations of traditional bank account balances that can operate on blockchain or other distributed systems. A new report from the RWA.io platform reveals that financial institutions are actively testing such solutions to move bank money onto modern payment infrastructure.

Tokenized deposits differ from popular stablecoins. They are a direct liability of a bank and are subject to the same regulations as traditional deposits, including deposit insurance, capital requirements, and anti-money laundering rules. As a result, they may be seen as safer and more aligned with the existing financial system.

In Europe, the first concrete trials are already underway. In January, Lloyds Banking Group and Archax carried out the first public blockchain transaction in the United Kingdom using tokenized deposits. Meanwhile, the Great British Tokenised Deposit project, led by UK Finance, is exploring use cases such as peer-to-peer payments, mortgage refinancing, and digital asset settlement. These trials are expected to continue until mid-2026.

Banks view this development as an opportunity to maintain their role in the evolving world of digital finance. As stablecoins and central bank digital currencies gain traction, competition in payments and value storage is intensifying.

Experts emphasize that the future financial system will rely on multiple forms of money. Tokenized deposits are expected to complement both private-sector solutions and potential central bank-issued digital currencies. While much attention is focused on stablecoins and CBDCs, the global economy still largely depends on money issued by commercial banks.

At the same time, the European Central Bank is advancing its own initiatives. It is working on a digital euro and preparing infrastructure for tokenized financial markets. The plan includes launching a new settlement mechanism that will connect blockchain platforms with Europe’s existing payment systems. This solution is expected to go live in the third quarter of 2026, with a digital euro pilot scheduled for the second half of 2027.