A group of leading U.S. banks are launching a digital payments initiative that seeks to modernize money movement across emerging chain networks.
The initiative will deliver on-chain clearing and settlement of tokenized deposits between banks within the established banking framework, supporting automated workflows, richer transaction data, and 24/7 settlement. It will also feature a connectivity layer linking blockchain-based activity with established fiat rails, such as the RTP and CHIPS networks, to facilitate movement between digital and traditional commercial bank money.
Tokenized deposits offer the benefits of digital payments, while preserving the ability to extend credit and support economic growth. This offering supports the growing demand for tokenized deposits.
The initiative will be operated by The Clearing House, a U.S.-based payments company that provides critical payment networks and is owned by 25 of the nation’s largest financial institutions.
“The banking industry has long provided the trusted infrastructure that underpins the movement of money throughout the global economy,” David Watson, president and CEO of The Clearing House, said. “The Clearing House is proud to help banks scale on-chain money movement by extending the safety, resiliency, and settlement certainty of regulated bank payment rails.”
The solution will be accessible to financial institutions across the United States, enabling banks of all sizes to participate in the global digital payments ecosystem. It has the support from major banks, including the Bank of America.
“As a leader in helping clients navigate the evolving digital asset landscape, Bank of America sees significant potential for tokenization, including tokenized deposits, to improve client experiences and outcomes. This initiative brings together the innovation of digital finance with the trust, scale, and settlement certainty of established bank payment infrastructure, creating an important foundation for future growth,” Mark Monaco, head of Global Payments Solutions at Bank of America, said.
It also has the support of BMO Financial, BNY, Citi, Citizens Financial, Fifth Third, HSBC, Huntington National Bank, JP Morgan, KeyBank, Regions Bank, Santander, PNC, Wells Fargo, Truist, TD Bank, and U.S. Bank.
“At Citi, we are committed to building infrastructure that enables seamless liquidity and payment movement across all markets, asset types, and currencies. The initiative with The Clearing House leverages their central role in the U.S. banking system to bridge traditional and digital networks. With solutions like Citi Token Services now live and at scale, and with tokenized securities rapidly gaining momentum, there is a critical need for The Clearing House to establish clearing infrastructure across member banks for both traditional and tokenized deposits facilitating industry-wide 24/7 and interoperable movement of cash and securities in the future,” Shahmir Khaliq, head of services at Citi, said.
Ted Swimmer, head of commercial banking at Citizens Financial Group, added that tokenized deposits extend the safety of bank deposits into digital environments with the potential for faster, more programmable payments.
“As use cases evolve, we’re exploring these capabilities and support a bank-led approach to advancing trusted, interoperable digital payments. The Clearing House is uniquely positioned to bridge on-chain innovation with proven payment infrastructure, enabling interoperability and scale across the banking system,” Swimmer said.
Zachary Wasserman, chief financial officer at Huntington National Bank, said the initiative highlights the power of banks working together to shape the future of digital payments while building on the strength of the existing banking system.