JPMorgan Chase, Citigroup and other major US banks plan to launch a tokenized deposit network next year, directly challenging crypto firms that are encroaching on traditional banking territory. The initiative represents Wall Street's most significant response to the growing threat of stablecoins, which could potentially siphon deposits from traditional financial institutions.

Operated by The Clearing House—co-owned by JPMorgan, Bank of America, Wells Fargo and others—the network will connect conventional payment systems with digital asset infrastructure. This "bridge" between traditional and crypto worlds will enable 24/7 instant settlements of tokenized deposits across blockchain technology, fundamentally changing how banks process transactions.

Clearing House CEO David Watson called this a "big move" for banks facing a "radically different" future in on-chain payments. The network targets a launch in the first half of 2027, reflecting mounting tension between banks and crypto firms over recent legislation that permits interest-like structures on stablecoins. This represents a strategic pivot for traditional finance in the digital asset era.