Why Vast Bank is advancing on tokenized deposits

• Key insight: Vast Bank is preparing to launch a retail tokenized deposit offering this year.
• What's at stake: Billions of dollars trapped in non-interest checking accounts could be safely unlocked through deposit tokenization, according to Vast CEO Linda Jenkinson.
• Forward look: Tokenized deposits could be bigger than stablecoins by 2030, according to a Citi report.

Banks are exploring a growing interest in digital assets, but still want the trust and stability of traditional deposits. One community bank is working toward launching an open "scheme" with tokenized deposits for banks that want to combine the two.

Vast Holdings, the parent company for Vast Community Bank, started collaborating with the digital asset trading platform Uphold and tokenized deposit issuer USBC last fall to create a retail tokenized deposit offering for customers to access digital representations of U.S. dollar deposits worldwide.

"The big difference here is that we're opening up access to U.S. dollars on the blockchain to people outside the United States, offering this in full compliance with all applicable laws and regulations," Uphold CEO Simon McLoughlin said at American Banker's ON-CHAIN Executive Summit.

"We're already operating," Vast CEO Linda Jenkinson said at the event. "Internally we've got everything working, and we have a phased rollout this year for individual customers and then extending into the API layer."

Tokenized deposits are digital representations of traditional fiat currency deposits, in this case the U.S. dollar, recorded on a distributed ledger and held at chartered banks.

"It comes with all the protections of the U.S. banking system, but it moves and behaves like a stablecoin," McLoughlin said.

McLoughlin noted that stablecoins are typically issued by fintechs, are not FDIC insured, don't pay interest and don't count as cash on a corporate balance sheet — all issues that he believes tokenized deposits address directly.

"Tokenized deposits are a superior product to stablecoin in that it's completely FDIC insured, there's no need to mint, the deposits are one for one backs and they can be used in the community [such as] in lending," Jenkinson said. "It's better for the economy as well as for the consumer."

Jenkinson noted that tokenized deposits and stablecoins will both be utilized by banks for "different and distinct use cases," but cited a 2025 Citi report that claims tokenized deposits could be bigger than stablecoins by 2030.

"There's billions of dollars trapped in non-interest checking accounts that sit in community banks and banks around the world," she said. "Basically, a tokenized deposit is taking that checking account and putting it onto the blockchain."

This isn't Vast's first foray into digital assets. The Tulsa, Oklahoma-based community bank initially enabled customers to purchase crypto from their bank accounts in 2021 through a crypto trading app, but ended the practice in 2024 amid regulatory scrutiny and following the collapse of FTX.

Now that the bank has come out of its consent order, according to Jenkinson, it's ready to meet the new regulatory moment with tokenized deposit offerings as a new use case.

"The Trump administration has been absolutely incredible for banking, crypto and fintech," she said. "They came out and said that they want the U.S. dollar to be dominant and want us to be leading in innovation."

Jenkinson argued that the way regulatory scrutiny has been applied to community banks has been "incredibly punitive" in the past and has been encouraged by recent positive sentiment on bank innovation from both local and federal regulators.

"It's a pretty dramatic time to be a bank in America," she said.