Wall Street builds tokenized money for institutions, not everyday savers

Wall Street runs trillions on blockchain, but not for retail customers

JPMorgan has moved more than $3 trillion through Kinexys, its blockchain platform — a shared digital ledger that records transactions. Citi Token Services processes billions of dollars in cross-border payments every day. Neither service is open to a regular person with a savings account.

Both banks keep their tokenized payment tools limited to institutional customers and permissioned networks, which are blockchains where only approved participants can join. A U.K. challenger bank called Monument is now preparing to test whether tokenized deposits can work for everyday consumers instead.

Key numbers

• JPMorgan's Kinexys platform has processed more than $3 trillion.
• Citi Token Services handles billions in cross-border payments daily.
• Both services stay restricted to institutional clients and permissioned networks.
• Monument Bank plans to tokenize up to £250 million in interest-bearing retail deposits on the Midnight blockchain.

Big bank token projects stay internal

Mintoo Bhandari, founder of Monument Bank, a U.K. challenger bank with a balance sheet of roughly $2.4 billion, said most bank token projects serve the banks themselves. “Most of the coins that have been minted and are being used for money transfer are all internal projects,” he said. Asked whether that is changing banking for consumers, he answered: “Is that really moving the needle for the whole bank and for the consumer? Not yet.”

Banks are stuck with 1970s-era systems

Bhandari said most banks promote their apps as proof of digital progress while relying on aging core systems. “99% of the banks in the world are like, 'Yeah, we're really digital, we have an app!',” he said. “But the reality is they're struggling with legacy architectures that go back to the 1970s that they cannot leap.”

Splitting money across networks is expensive

Jerald David, CEO of Lynq Network, said treasury desks at major institutions now juggle three systems for the same job: a JPMorgan tokenized deposit for one client, a regulated stablecoin — a digital token designed to hold a steady value — for another, and a conventional correspondent account for a third.

“What clients can't afford are separate pools of liquidity locked up on every network they access,” David said, “because idle liquidity fragmented across five networks is five times the capital inefficiency of idle liquidity sitting in one place.”

Monument's plan for retail tokenized deposits

Monument and privacy-focused blockchain Midnight plan to tokenize up to £250 million of interest-bearing retail deposits. The project would use zero-knowledge proofs, a cryptographic method that proves data is valid without revealing the data itself, to protect customer data while meeting regulatory requirements.

The goal is to let consumers reach tokenized investments and lending through a normal banking app, without needing to understand or directly use cryptocurrency.

How a tokenized deposit differs from a stablecoin

Unlike a stablecoin, a tokenized deposit remains a claim on the bank that issued it. It can bear interest, stay inside the regulated banking system, and potentially be programmed to settle against tokenized assets automatically.

What is confirmed

JPMorgan reports more than $3 trillion moved on Kinexys, and Citi reports billions in daily cross-border payment volume on Citi Token Services. Both services are limited to institutional customers and permissioned networks. Monument Bank, with a balance sheet of roughly $2.4 billion, has announced plans to tokenize up to £250 million in interest-bearing retail deposits on Midnight using zero-knowledge proofs.

What is still unclear

The source article poses an open question: whether banks can deliver the benefits of tokenized deposits to retail customers. No launch date is given for Monument's project, and its outcome is unproven.

Why this matters

Tokenized deposits could give everyday customers access to tokenized investments and lending through a banking app they already use, without requiring them to learn crypto. Monument's plan, if it works, would bring a tool now limited to institutional customers into retail banking.

Sources

• CoinDesk