Banks go full crypto: stablecoins and tokenized deposits redraw global finance map

The early phase of institutional adoption saw financial giants like JP Morgan, Wells Fargo, Visa, and Mastercard stepping decisively into the stablecoin arena by 2025, signaling a shift from cautious experimentation to active integration. These banks piloted stablecoin-based solutions to overhaul legacy payment rails, aiming to replace slow, expensive wire transfers with instant, low-cost transactions—reducing costs from $40 and three-day waits to mere cents and seconds. This foundational move not only demonstrated the practical efficiency gains of tokenized money but also set a precedent for the broader banking sector to follow.

Regulatory momentum under the Trump administration in 2025 proved pivotal, emboldening banks and fintechs to launch pilots and integrate stablecoins even as the regulatory framework was still evolving. As one analysis put it, 'all the companies, big banks and institutions, they're all leaning in now... knowing the regulations are coming,' highlighting how policy signals catalyzed a wave of institutional engagement. This regulatory tailwind transformed what had been a period of cautious experimentation into a race to modernize, with institutions eager to position themselves ahead of impending rules.

The UK’s financial sector quickly followed suit, with UK Finance launching a landmark pilot for tokenized sterling deposits in late 2025, involving six major banks including Barclays, HSBC, and Santander. Powered by Quant Network’s blockchain interoperability platform, the pilot aimed to explore tangible benefits such as enhanced payment control, fraud prevention, and streamlined settlement—demonstrating that the promise of tokenized money was not just theoretical, but already being tested at scale. Scheduled to run through mid-2026, this initiative underscored the sector’s commitment to integrating blockchain into the heart of traditional banking.

By late 2025, U.S. Bank’s pilot of a USD-backed stablecoin on the Stellar blockchain and JPMorgan’s launch of the $100M MONY tokenized money-market fund on Ethereum signaled a deepening convergence between traditional finance and public blockchain networks. These moves, along with SoFi Bank’s fully reserved SoFiUSD stablecoin and Coinbase’s rollout of an 'everything exchange' using USDC for settlement, showcased growing institutional confidence in tokenized assets and a drive to eliminate counterparty risk and regulatory ambiguity. The competitive pressure to modernize settlement capabilities was palpable, as banks raced to offer digital dollars that could move instantly, pay interest, and qualify as cash on corporate balance sheets—features that fintech-issued stablecoins had struggled to deliver.

The momentum culminated in early 2026 with Swift’s announcement of a shared ledger initiative, a watershed moment for institutional blockchain adoption. By building infrastructure to bridge traditional financial institutions and digital asset networks, Swift aimed to address fragmentation and promote interoperability, accelerating the mainstream integration of tokenized money while ensuring regulatory compliance. This move by the world’s leading financial messaging network signaled that blockchain settlement was no longer a fringe experiment, but a core pillar of the future financial system.

The competitive landscape in banking has been fundamentally reshaped by the rise of tokenized money, with major institutions like JP Morgan issuing tokenized deposits on public blockchains such as Base. Unlike stablecoins and CBDCs, tokenized deposits bridge traditional banking services with blockchain efficiency, appealing particularly to Fortune 500 clients who value the credit risk management and comprehensive services that established banks provide. This evolution underscores a strategic pivot by banks to maintain their relevance and trust advantage, as clients increasingly demand on-chain solutions that go beyond mere money movement.

The regulatory environment has become a key battleground shaping adoption and market structure, with legislative breakthroughs like the Genius Act enabling banks such as JPMorgan Chase to launch stablecoin payment rails that bypass legacy intermediaries like Visa and Mastercard. However, the evolving definition of stablecoins—currently limited to one-to-one Treasury backing—remains in flux, with future frameworks likely to accommodate yield-bearing and savings stablecoins. This regulatory uncertainty has fueled intense lobbying from both banking and crypto interests, as seen in the collapse of the CLARITY Act and the ABA’s push to protect deposit bases, while global jurisdictions from Japan to China race to adapt their own frameworks and compete in the emerging digital money ecosystem.

Competition is intensifying not only among banks and fintechs but also with non-bank stablecoin issuers and even tech giants like Sony, who are entering the stablecoin market and introducing new instruments such as yield-bearing coins and on-chain repo. This influx of players and products is commoditizing stablecoin issuance and shifting the advantage to those with the largest distribution networks—Stripe, for example, has rapidly expanded its influence post-Bridge acquisition. Meanwhile, major banks are responding by integrating blockchain-based settlement and tokenized assets into their core offerings, as evidenced by Citi’s partnership with Coinbase and State Street’s launch of a Digital Asset Platform, signaling a race to define the next era of financial infrastructure.

As tokenized deposits and stablecoins proliferate, the lines between traditional finance and crypto are blurring, with banks like JPMorgan, Bank of America, and UBS now offering native crypto services and leveraging blockchain for institutional transfers. This convergence is driving the emergence of new market structures—such as instant atomic settlement via networks like Canton and the NYSE’s planned 24/7 tokenized securities exchange—while also shifting the locus of trust from bank balance sheets to blockchain infrastructure. The result is a more resilient, accessible, and innovative financial system, but one where regulatory, competitive, and geopolitical dynamics will continue to shape the pace and direction of transformation.

The mainstreaming of programmable money is being driven by a wave of institutional adoption and technical innovation, as legacy giants like Swift, J.P. Morgan, Citi, and BNY Mellon move from proof-of-concept to full-scale deployment of blockchain-based settlement platforms. In late 2025, Swift’s partnership with ConsenSys and a coalition of over 30 major banks—including Bank of America and Citi—marked a watershed moment, creating a blockchain prototype for instant, always-on cross-border payments and signaling Ethereum’s pivotal role as the underlying infrastructure. This momentum accelerated into 2026, with Citi and Coinbase launching programmable stablecoin payment solutions for institutional clients, U.S. Bank piloting USD-backed stablecoins on Stellar, and BNY Mellon operationalizing tokenized deposits for clients like ICE and Circle, all of which underscore a decisive shift from skepticism to active integration of programmable, interoperable money within the global financial system.

A new financial infrastructure is rapidly taking shape, characterized by real-time, 24/7 settlement, cross-border interoperability, and programmable features that transcend traditional banking limitations. The launch of platforms like the London Stock Exchange Group’s Digital Settlement House and the Canton Network—now home to JPMorgan’s JPM Coin and BNY Mellon’s tokenized deposits—enables instant atomic settlement, eliminates counterparty risk, and supports multi-asset, multi-currency transactions. These advances are complemented by the proliferation of stablecoins, such as Fidelity’s Digital Dollar and SoFiUSD, which are increasingly backed by high-quality reserves and integrated with neobank cards and payment providers like Stripe and Worldpay, signaling a future where digital cash and tokenized assets flow seamlessly across both legacy and blockchain rails.

This transformation is underpinned by growing regulatory clarity and industry alignment around standards such as ISO 20022, which are enabling interoperability and compliance at scale. Proofs-of-concept from Ant International, HSBC, and Swift, as well as regulatory moves like the OCC’s Interpretive Letter 1188, have cleared the path for banks to act as riskless principal intermediaries and for tokenized deposits to move across networks with atomic settlement. As stablecoin issuance becomes commoditized, the locus of value is shifting toward distribution, compliance, and integration—highlighting the importance of APIs, bank partnerships, and embedded finance solutions in scaling programmable money for mainstream adoption.

The convergence of programmable money, advanced blockchain networks, and emerging technologies like agentic AI is setting the stage for a new era of always-on, intelligent finance. Mega ETH’s successful stress test—processing 11 billion transactions in a week without disruption—demonstrates the scalability and resilience of next-generation blockchain infrastructure. Meanwhile, the integration of AI with smart contracts on stablecoin rails is poised to unlock new levels of automation and efficiency, further blurring the lines between traditional and decentralized finance and cementing programmable, interoperable money as the backbone of the global financial system.