Digital assets have gone mainstream faster than most institutions planned. Central banks are trialling tokenised government debt, commercial banks are piloting tokenised deposits, and regulators in Washington and London are racing to provide the industry with the legal certainty it has spent years seeking.
Seemingly, nobody wants to be left without their own digital rail. But things are still very much in flux. Next gen finance builders in the US have just seen their push to get the CLARITY Act over the line stall in the Senate, leaving them navigating a complex set of guardrails. Over in the Gulf, progress appears faster, and more forward-thinking as state-backed institutions roll out dirham-pegged stablecoins as a matter of national strategy.
In the private sphere, financial giants including Wells Fargo, Bank of America and Citi are pushing ahead with this digital currency revolution. They are backing an upcoming stablecoin initiative that will focus on a U.S. dollar-denominated stablecoin which could expand into other G7 currencies as early as the start of next year.
So, what’s driving mainstream adoption, and why are large institutions, particularly in the US, racing to build their own tokenised infrastructure rather than risk being disrupted by it?
The threat isn't hypothetical, and it's already on the balance sheet
Tokenised deposits are being framed as innovation, but it would be more accurately described as risk mitigation. S&P Global Ratings warned in June that growing stablecoin use could pose a competitive threat to banks’ payment income, weaken their reliance on deposit funding, and put pressure on deposit pricing. That warning comes from a mainstream ratings agency, underscoring that this is now viewed as a structural risk rather than a speculative one.
If deposits shift from retail to wholesale funding, banks’ lending capacity weakens, and loans get more expensive which means deposit yields will have to rise to stay competitive. For now, most USD stablecoin demand originates outside the US, which limits the immediate exposure. But that comfort has an expiry date. The moment stablecoins expand beyond crypto-settlement and currency-hedging use cases into everyday domestic finance, the risk stops being someone else’s problem.
The infrastructure already works, and it wasn't built by banks
Stablecoins are already moving huge volumes through international payments, solving some problems traditional cross-border rails have not yet managed to fix such as real-time settlement and faster liquidity access to multi-currency visibility. None of what’s happening today is theoretical anymore.
Much of this innovation took hold first in markets where conventional banking infrastructure fell short, and fintechs and digital-asset platforms built the alternative rails to meet demand that banks weren’t serving. So when tokenised-deposit networks launched, they entered a market whose value had already been proven, at scale, by someone else. If you look at recent history, I believe bank participation will accelerate the pace of adoption but it may not necessarily set the direction, a position it used to hold.
Regulation is catching up and raising the stakes
Regulatory uncertainty has held the industry back for years. In my view, that uncertainty is lifting fast in some markets, even as it persists in others. As mentioned above, the Clarity Act failed its Senate vote, with opponents arguing the bill’s ethical guardrails were too weak. They also pointed to high-profile figures profiting from private crypto ventures at the expense of everyday investors. I’d frame this as a legislative delay, not a signal that momentum is slowing. Foundational US rules, including stablecoin regulation under the GENIUS Act, remain unaffected and active, and businesses working across US digital asset markets must continue navigating a patchier federal picture for now.
In the UK, the picture is more coordinated. The Bank of England and the FCA have published a joint roadmap for tokenisation in wholesale markets. Meanwhile, the Treasury’s DIGIT programme is preparing to issue a digital gilt, and the Bank has committed to a live asset-synchronisation service. Different mechanisms, different timelines, but the same direction of travel.
Yet to my mind, none of this creates the demand. The demand already exists, and has for some time. What regulatory clarity actually does is let banks compete properly in a market they’ve been approaching cautiously until now, and where it’s still missing, as in the US at the federal level, it simply means businesses lean more heavily on the frameworks that are already in place.
Big banks are responding to the market, not defining it
The shared tokenised-deposit network mirrors what stablecoins have already demonstrated at scale: faster settlement, more efficient liquidity movement, cross-border certainty without the multi-day wait. The structural difference is what banks get to keep. Stablecoins were built by fintechs and digital-asset firms operating outside the banking system entirely. Tokenised deposits let banks deliver comparable functionality while holding onto the liability, the balance sheet, and the deposit relationship that everything else depends on.
That shift is already underway. Earlier this year, JPMorgan, Citi and Bank of America confirmed plans for a shared tokenised-deposit network, to be operated by The Clearing House, with a launch targeted for mid-2027, one of the clearest signals yet that the largest US banks possibly see this as core infrastructure rather than experimentation.
That’s the real story here, as I see it. Innovation happened outside banking first, as fintechs moved quickly to meet demand that was already there. Banks are now building comparable capability into their own frameworks, following a commercial case and competitive landscape that were largely shaped outside the banking sector.
Setting the pace versus catching up
A working model for digital money movement already exists, and major banks are now adopting it. As regulatory clarity improves, I believe the main competition ahead is about delivering on the original promises, such as instant, transparent settlement, without the friction that’s defined cross-border finance for decades.
Banks entering the space will help accelerate the shift, and they’ll shore up their own position in the process. But make no mistake about who’s setting the pace. The organisations that built where traditional infrastructure fell short got there first, and they’re still the ones defining where this goes next.
Jovi Overo
Jovi Overo is CEO at ONE.io. A seasoned fintech professional with over 18 years of experience in the financial industry, Jovi has successfully led and delivered cutting-edge solutions and driven growth for various fintech, payments, banking, and crypto businesses.
