US banks are building tokenized deposits to modernize payments while keeping funds on their balance sheet, allowing them to continue lending that money. A tokenized deposit stays on the issuing bank’s balance sheet, whereas a stablecoin moves funds into the issuer’s reserves, where the issuer captures the yield. Wells Fargo announced in August the launch of tokenized deposits for corporate clients this fall, and JPMorgan already operates JPM Coin on the Base blockchain. Estimates suggest that a migration of 1% to 3% of US bank deposits, between $195 billion and $586 billion out of a total of $19.5 trillion, to stablecoins would raise funding costs and compress margins even before deposit outflows become fully visible.
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