Tokenized deposits are emerging as a third form of digital money alongside stablecoins and CBDCs. Unlike stablecoins issued by private companies or CBDCs issued by central banks, tokenized deposits are standard commercial bank deposits represented as tokens on a blockchain. They remain liabilities of licensed, regulated banks, preserving existing regulatory frameworks while enabling faster settlement, programmability via smart contracts, and 24/7 availability. JPMorgan's Kinexys (JPM Coin) is a live example. Key open questions include who can issue them, cross-border jurisdiction, insolvency protections, and whether they can safely interact with DeFi protocols. For Web3 builders, they could offer a regulated alternative to stablecoins as a settlement layer.
