- Tokenized deposits could make bank funding less stable and raise credit costs for US households and businesses, according to Dallas Fed economists.
- Instant settlement and programmable tokens may allow depositors to switch banks faster, increasing deposit sensitivity to interest rates.
- If deposits become 10% more rate-sensitive, banks’ capacity to hold long-term loans could decline by about $700 billion; a 10% shorter deposit duration could reduce that capacity by $580 billion.
- US banks are building shared blockchain networks — including the BankChain Alliance and a network by The Clearing House — to move tokenized deposits around the clock.
Tokenized deposits could destabilize bank funding and raise credit costs for US households, according to an analysis by two economists at the Federal Reserve Bank of Dallas. Economists Rosie Levy and Srini Ramaswamy said instant settlement could allow depositors seeking higher yields to switch banks more quickly.
However, programmable deposit tokens and agentic AI could automate these transfers, shortening the time deposits remain at banks and making them more rate-sensitive. The economists estimated that if deposits became 10% more sensitive to interest rates, banks’ capacity to hold long-term loans could fall by about $700 billion; a 10% shorter deposit duration could reduce that capacity by roughly $580 billion. Meanwhile, thirty-nine US state banking associations formed the BankChain Alliance on Tuesday to develop a nationwide network for tokenized deposits and stablecoins.
The Clearing House is developing a separate network backed by JPMorgan Chase, Bank of America, Citi, BNY and Wells Fargo. On Aug. 20, Standard Chartered and HSBC completed a live cross-border transaction through Swift’s blockchain ledger, linking their separate systems. Consequently, banks could respond to more volatile deposits by holding larger portfolios of liquid assets or relying more on wholesale debt, which would likely raise credit costs for consumers and businesses.
The authors cited Brazil’s Pix instant-payment system as a potential comparison, though not identical. A 2025 study found that heavier Pix use increased banks’ holdings of liquid assets and reduced credit intermediation.
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