The race to establish tokenized deposit networks is heating up as four separate bank-led initiatives each promise to give participating institutions the ability to clear and settle transfers and payments between their customers, while also proclaiming to offer unique benefits that set them apart.
The competition is unfolding despite the fact that investment in these digital assets remains low. A 2026 report from Cornerstone Advisors found that just 9% of senior executives at banks and 5% at credit unions planned to invest in or implement tokenized deposits this year. Still, 57% of executives at banks and 42% at credit unions said they had discussed tokenized deposits at the board or executive team level.
For some, the urgency to establish the networks is being fueled by a surge in cryptocurrency firms securing conditional approvals for national trust bank charters. If those approvals become final, a nationwide charter would not only give those crypto firms the ability to maintain custody over stablecoins, but to also issue them and handle digital asset payments and settlements. Banking groups are concerned that could result in deposit flight from traditional financial institutions.
Stablecoin and tokenized deposits are both considered ”tokenized assets” because they represent real-world, dollar-for-dollar value on a blockchain and can both be used to make instant, real-time payments. But only tokenized deposits are digital representations of actual deposits that sit on a financial institution’s balance sheet and are covered by the Federal Deposit Insurance Corp.
While some believe the value of stablecoin is overhyped, David Birch, founder and principal of the global digital financial advisory and consulting firm 15Mb Ltd., says banks clearly feel the need to protect their interests. “These are defensive strategies from a banking point of view,” he says, adding that the network providers are all asking the same question: ‘’How can we respond to that [threat] to at least keep some sort of toehold?’’
Who Is Developing These Networks?
Of the four networks announced to date, two are being developed by entities owned by or affiliated with large banks, and two are being developed by and for community banks. They include:
- The Clearing House Payments Co. Owned by 25 of the nation’s biggest banks, this is the largest player in the space. The Clearing House announced in June it will develop not only a tokenized deposit network, but also a connectivity layer linking that blockchain-based activity with its established payment rails, the Real Time Payments (RTP) and the Clearing House Interbank Payments System (CHIPS) networks, to facilitate movement between digital and fiat bank currency. The Clearing House’s goal is to launch the new initiative in the first half of 2027.
- The Cari Network. In March 2026, the Cari Network launched a minimum viable product to its six partner banks — First Horizon Corp., Huntington Bancshares Inc., KeyCorp, M&T Bank Corp., Old National Bancorp and SouthState Bank Corp — which allowed them to test it in a sandbox environment. More than 30 banks have joined since. The Cari Network is preparing to enter its pilot stage later this summer, with the goal of becoming fully operational by the end of the year.
- The Hazel Network. Custodia Bank, a digital asset service provider with a state bank charter in Wyoming, and $4.9 billion Vantage Bank Texas, based in San Antonio, officially launched this network in June. The two entities developed a number of pilot initiatives together in 2025, including one that allowed Vantage to convert customer deposits into digital tokens, and then issue, transfer and redeem them as stablecoins for the customer. The Hazel Network just kicked off its pilot phase with two banks this summer, and hopes to have 10 banks on board by the time it becomes fully operational in the fourth quarter of 2026.
- The DTX Consortium. Ninety miles up the road in Austin, the Independent Bankers Association of Texas (IBAT) just selected a trio of vendors to build out this tokenized deposit network. IBAT has already brought more than 60 community banks in as members of the network. Its goal is to launch a pilot later this year, with the DTX Consortium becoming fully operational in the first half of 2027.
How Do Banks Stand To Benefit?
The people leading each of these networks believe their initiatives provide specific benefits to prospective banks that set them apart from the others.
The two largest networks both have scale and can offer banks access to a large number of customers. Eugene Ludwig, founder and CEO of the Cari Network, says 40 more banks are in discussions to join, which would give them more than 70 total. “We’re up in the neighborhood of $2 to $3 trillion worth of assets by the banks that have joined the network already, which I think gives us critical mass,” he says.
Sal Karakaplan, chief strategy officer for The Clearing House, says the size of its owner banks will clearly provide scale, but he believes the true differentiator for the network will be that interoperability with its existing fiat payment rails. “Whereas anybody who is starting this from a [block]chain capability and needs to then go and integrate into the fiat capability, [they] are not going to get the benefit of the fiat settlement know-how that we have had for decades — more than a century actually,” he says.
But Shawn Main, executive vice president and chief business architect officer for Vantage Bank Texas, says he believes banks that truly want to compete with crypto firms should focus on networks that will help them specifically move forward on blockchain. He says the Hazel Network will do that through the use of its patented dual-character tokenized U.S. dollar, which automatically transforms between a tokenized deposit inside the network, and a stablecoin outside of it.
“You can move it however you need to — to other banks, other customers in the bank, or you can take it out of the banking system just like a cashier’s check, and hold that cashier’s check and then send it to whoever you want to send it to,” Main says.
Neither The Clearing House nor the Cari Network plan to offer such stablecoin integration at this point. IBAT CEO Christopher Williston says the DTX Consortium also will not offer that capability at launch but would like to in the future.
Williston believes the true benefit of the DTX Consortium is one of ownership. It will allow community banks to purchase an equity stake that gives them a say in both the consortium’s operation and future. Williston believes community banks need their own network, not one owned by large banks. He says Zelle, which is operated by a fintech company owned by the nation’s largest banks, offers little negotiating leverage to community banks.
“I think that having that same reality applied to the tokenization of deposits would be a really disastrous outcome for community banks,” he says.
Regardless of which network they choose, executives with all of the providers say banks should start developing a plan for tokenized deposits and examine their choices carefully. While Birch understands why these providers are moving so quickly, he says there is no reason for banks to be in any rush to join them.
“Don’t get panicked into [thinking], ‘Oh my God, we’ve got to do something tomorrow,’ because that’s not true,” he says. “The truth is, this is still very early days for all of this. And you can’t point to any one of these and say, ‘Oh, of course, that’s the way to do it.’ I mean, I don’t think we’re anywhere near that yet.”
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