Tokenization

The DTCC piloted a tokenized version of its stock-settlement system. But the real future of trading has to involve currency, not just securities.

Caitlin Long, CEO of Custodia Bank, sits down with tech reporter Melinda Lucy to talk about the bank's launch of its on-chain Hazel Network in partnership with Vantage Bank, the stablecoins versus tokenized deposits debate and how the Hazel Network brings the two technologies together under a familiar legal framework for banks.

Seventeen banks, including BNY, Citi, HSBC, Standard Chartered and Wells Fargo, will make tokenized cross-border payments as the messaging network looks to counter threats from digital asset fintechs.

The nation's largest bank's fund for stablecoin issuers seeking GENIUS Act–compliant yield vehicles already has $700 million in assets.

With Robinhood Chain now live, the company is pushing into tokenized equities, stablecoin lending and international markets.

Market watchers say it is plausible that regulators will have established rules of the road for tokenized bank deposits by next year. But to get there, many outstanding issues will need to be ironed out first.

Securities and Exchange Commission Chair Paul Atkins said tokenized bank deposits are likely to be a reality in 2027, and added that he is working with banking agencies on digital assets and capital requirements.

Foreign investors are gobbling up tokenized U.S. equities while domestic investors remain unable to take advantage of the opportunities such assets offer. U.S. policymakers need to level the playing field.

Chair Travis Hill said the Silicon Valley Bank failure showed banks can't always sell securities fast enough to cover deposit outflows, but acknowledged the "stigma problem" with discount window borrowing remains unsolved.

Tokenization of assets is going to transform global finance, but by dragging their heels on establishing clear rules of the road, U.S. regulators could be pushing the development of key infrastructure overseas.

Tokenization is being adopted from within the system, not alongside it. It's improving how markets operate by making settlements faster, increasing their mobility, boosting transparency and expanding access.

Federal Reserve Gov. Lisa Cook said Friday that she believes tokenization could improve efficiency across the financial system, including faster settlement times and more effective recordkeeping. But those advantages will take place within traditional finance rather than supplanting it, she said.

The president's son has seemingly cut ties with the digital asset fintech ALT5 Sigma, whose shares lost 90% of their value after purchasing the tokens.

While stablecoins aren't widely used for payments, banks still have a role to play in leading the market.

The move is the first cog in a wider plan to make tokenized deposits more interoperable across borders and, eventually, among the bank's clients.

The tokenization platform provider, which has a nonbinding agreement with NYSE and is aiming for a public debut, promoted former SEC Trading and Markets Director Brett Redfearn to the role.

On-chain infrastructure is making idle balances obsolete. The OCC needs to act before banks lose the ability to compete in a market where consumers no longer tolerate below-market-rate returns.

Bank of Montreal has introduced a tokenized cash and deposit platform, while the London-based Monument is partnering with the Midnight Foundation's distributed ledger. Also, Starling Bank's AI play, stablecoins gain ground in APAC and Africa and more in the American Banker global payments and fintech roundup.