08-27-2026 
|
Getting your Trinity Audio player ready...
|
U.S. banks could face a new threat to their lending capacity from tokenized deposits, so banks are looking to get with the program by launching their own blockchain.
- Federal Reserve warning re tokenized deposits’ threat to bank lending
- BankChain Alliance plots bespoke blockchain
- Former SEC director: ‘Reg Crypto’ rules won’t survive court challenge
- Fed study on crypto ownership undercuts industry claims
- The winning message for Bitcoin is Bitcoin is winning
- Americans really don’t want crypto in their retirement accounts
While banks continue to push for changes to the stablecoin language in the Senate’s digital asset market structure legislation (the CLARITY Act) that they claim would reduce their ability to issue new loans, a new report by the Federal Reserve Bank of Dallas says tokenized deposits could pose similar risks.
That report, Tokenized deposits could affect bank liquidity, maturity transformation, argues that “stablecoins and tokenized deposits differ in important ways that could pose meaningful consequences for the banking sector.”
While banks have been far more welcoming of tokenized deposits than stablecoins, the report warns that “significant tokenized deposit adoption could meaningfully affect bank maturity transformation, which may impact availability of credit for households and businesses, and liquidity management.”
Dividing bank deposits into operational and nonoperational silos, the report’s authors say operational deposits (core funds needed for clearing, custody, or cash management) are “stickier for liquidity management purposes.” Bank customers utilizing a variety of bank services are “less likely (or less able) to rapidly withdraw” these operational balance deposits, leading to lower interest rates and longer lifespans.
But tokenized deposits and instant settlement would reduce friction, allowing customers in search of higher yield to “switch banks almost instantaneously.” Artificial intelligence (AI) agents programmed to seek out greater yield options could even handle this switching without requiring a customer’s direct involvement.
Tokenization “could lower the average life of deposits while making them more rate sensitive.” A 10% reduction in the weighted average life of deposits “would shrink maturity transformation capacity by about $580 billion,” while a 10% increase in the price sensitivity of deposits could cause a $700 billion reduction in banks’ duration risk appetite.
The report suggests that banks could implement pricing changes to mitigate some of these risks, but banks would also “need to hold larger high-quality liquid asset portfolios to remain certain of their ability to meet unexpectedly high deposit outflows.” And as funds flow out, banks’ capacity to offer loans shrinks.
With the risks of widescale tokenized deposits in the U.S. still theoretical, the authors look to Brazil’s 2020 implementation of its Pix instant payment system. Pix now boasts ~200 million active users, making total monthly transactions of ~US$650 billion, the equivalent of around one-quarter of Brazil’s annual GDP.
Heavy use by Pix customers increased Brazilian banks’ need for liquid assets and reduced credit intermediation. Banks looking to maximize returns responded by increasing their share of subprime loans (with predictable results).
While banks within the U.S. and abroad are exploring tokenized deposit options, the report’s authors urge stakeholders and policymakers to “consider the potential implications for current payment systems, monetary policy transmission and implementation, potential asymmetric effects across bank sizes and types, and the role of the central bank as the lender of last resort in a heavily tokenized world.”
A recent American Banker survey found that among financial institutions that are either ‘discussing, planning or implementing on-chain technology,’ 7% are already offering tokenized deposits to customers, while another 11% were currently piloting such a program. Another 12% have a launch planned within the next 12 months.
BankChain Alliance plots bespoke blockchain
Another example of banks preparing themselves for this brave new blockchain-based world came this week via the announcement of the BankChain Alliance. The Alliance, which involves 39 state bankers’ associations representing ~3,000 banks, intends to create an “industry-owned, industry-designed and industry-governed network built on a common blockchain platform.”
The Alliance’s interim chair, Florida Bankers Association CEO Kathy Kraninger, said this “unprecedented collaboration” would allow banks “of all sizes to provide modern capabilities so they can continue serving customers safely and efficiently in rural, urban and regional communities across the country.”
The Alliance claims to be undertaking “a rigorous process to select a technology partner and is targeting a 2027 launch.” The Alliance is exploring all options for its new network, including tokenized deposits, automated payments, and even its own stablecoin(s).
White House crypto adviser Patrick Witt, who has repeatedly chastised bankers for seeking to amend CLARITY to include specific language preventing third-party crypto platforms from offering ‘rewards’ to customers who hold stablecoins on these platforms, had a one-word response to news of the Alliance: “Oh.”
Former SEC director: ‘Reg Crypto’ rules will die in court
Fresh off its ‘Reg Crypto’ proposals promising greater latitude for token issuers, the Securities and Exchange Commission (SEC) has sent its proposed amendments to digital asset custody rules to the Office of Information and Regulatory Affairs—an offshoot of the White House’s Office of Management and Budget—for approval.
According to the SEC, the revised rules “would clarify the framework for the custody of crypto assets for investment adviser and investment companies, as well as make other modernizations needed to remove burdens from certain outdated provisions that are no longer needed to provide investor protection given the evolution in the markets and security trading and holding practices.”
Meanwhile, former SEC enforcement director John Reed Stark isn’t letting up on his criticism of the agency’s Reg Crypto proposals. On Tuesday, Stark tweeted his “Brief That Will Take Down the SEC’s Crypto Deregulation Rule” and urged his followers to “Cut. Paste. File. Win.”
The Reg Crypto rules are currently subject to a 60-day comment period, but Stark wants his followers to file a complaint with the nearest U.S. Court of Appeals instead. We’ll leave it up to you whether you want to peruse the entire 88-page brief, but his tweet is a lot more entertaining, so here we go.
Stark claims Reg Crypto “would strip SEC registration protections from a fraud-saturated, multi-trillion-dollar so-called asset class.” Stark claims these digital assets are, at their core, “math with a marketing budget.”
Stark’s brief says Reg Crypto “exceeds the SEC’s exemptive authority … rests on findings the record cannot support and the SEC’s own decade of litigated positions squarely contradicts … cannot be sustained by any honest economic analysis” and robs Congress of its ability to decide what protections U.S. investors should expect.Stark says filing the brief in court rather than submitting it as a comment to the SEC is warranted because SEC chair Paul Atkins “doesn’t care about comments.” Stark cites the SEC’s recent proposal to eliminate quarterly-reporting requirements for public companies, despite “99.5%” of the “more than 200,000 Americans” who submitted comments objecting to the plan, only for Atkins to decide that the comments reflected a “misunderstanding” of what’s at stake.
Stark offered his ‘guarantee’ that if Reg Crypto “is adopted and challenged, the SEC will lose.” Stark characterized the SEC’s chances of prevailing in court as “slim and none—and Slim just left town.”
BTC ownership: who ya gonna believe?
The recent spike in the price of BTC and other prominent tokens has some wondering whether the surge will last, and others wondering what caused investors/speculators to open their wallets following months of utter disinterest.
Just before last week’s liftoff, the Federal Reserve Bank of Cleveland issued a working paper titled Do You Even Crypto, Bro? The paper drew on Nielsen Homescan Panel surveys from 2018 through 2025 to consider “the prevalence of crypto-ownership among U.S. households, the reasons some households choose to hold Bitcoin and others don’t, the perceived risks and benefits of cryptocurrency as an investment, and the effects of crypto price volatility on the spending decisions of its investors.”
Much of the paper’s findings are based on data gleaned five or more years ago, but it did report that ~12% of U.S. households owned some form of ‘crypto’ in 2025, back when BTC and other tokens were hitting all-time highs.
The paper notes that the share of crypto owners fell 2-3 points following the ‘crypto winter’ of 2022-23. So it’s reasonable to assume that 2025’s 12% has similarly retreated in tandem with the post-2025 price decline (even with its recent surge, BTC is still down more than one-third from that peak).
Regardless, the paper’s ownership stats are on par with previous surveys showing U.S. crypto ownership ranging from 7-14% (and similar ranges in the U.K.). Given the current U.S. population of ~350 million, 12% would represent some 42 million crypto owners, and remember, that’s at its all-time peak.
Compare that with the far more grandiose claims of crypto execs just last week that 67 million Americans own crypto, using numbers derived from self-serving crypto-funded surveys, and you start to wonder what other figures the industry might be fudging.
Bitcoin’s time-share pitch
Speaking of industry-funded surveys, this week saw the Bitcoin Policy Institute (BPI) release the results of a new national survey titled “The Bitcoin Messages that Resonate with Everyday Americans.”
(Before we get to the actual messages, we’ll note that the survey found 17.6% of respondents currently own Bitcoin (although just 13.7% own it directly, the rest owning through a retirement or investment account). Yet more proof of the industry’s uncanny ability to always find a higher number of crypto owners than more impartial inquiries. Odd, that.)
Keep in mind that ‘resonate’ in this context means ‘makes them more likely to buy’ BTC. So these everyday Americans were definitely not presented with messages on how easy it is to lose your seed phrase and kiss your tokens buh-bye forever, or how they feel about Iran using BTC for tolls to navigate the Strait of Hormuz.
Anyway, the survey tested 19 Bitcoin-related messages across a variety of audiences and then ranked them according to a ‘message effectivity’ score. (FYI, the lowest-ranked message was ‘YOLO.’ Focus group participants also said they were confused by the phrase ‘digital gold.’)
The nine messages that had the strongest positive impression were grouped into four themes: Control, Safety (Proven Performance), Security, and Access/Ease of Use.
The Control theme includes the messages ‘freedom money’ and ‘you decide how much’ (to invest). The Safety theme included ‘volatility is vitality,’ aka the belief that major price swings aren’t a bad thing, along with ‘4-year gains’ that cited historical price rises over four-year periods.
Security included ‘same security’ that emphasized the importance of buying BTC via “a major U.S. brokerage,” along with ‘institutional adoption’ detailing BTC’s growing acceptance among major tradfi firms.
Access/Ease of Use’s winning messages included ‘inflation defense,’ ‘familiar apps,’ and ‘step-by-step.’ The first is self-explanatory, while the latter two highlight the ability to buy BTC through brokerages that walk you through the buying/storing/selling process.
BPI’s head of research, Sam Lyman, said the results will help inform ‘Bitcoiners’ on “how to effectively communicate with everyone else.” BPI senior fellow Troy Cross waxed a little more philosophical, saying Bitcoin is “as much a social movement as it is a technology.”
Retirees say crypto should GTFO of retirement accounts
A different survey found that Americans are deeply skeptical of any movement of crypto into their retirement plans. The National Institute on Retirement Security issued its Retirement Insecurity 2026: Americans’ Views of Retirement report this week, showing a growing number of Americans are convinced the country is ‘facing a retirement crisis’ and believe crypto will make a bad situation worse.
Asked whether they favor employers offering cryptocurrency as an investment option in a workplace retirement savings plan, 53% are opposed, with the bulk (33%) of those ‘strongly’ opposed. Less than half that number (26%) are in favor, of which just 6% are strongly in favor.
Crypto’s numbers are even worse when it comes to how risky Americans view the inclusion of crypto in workplace retirement plans, with 46% calling it ‘very’ risky and another 31% saying ‘somewhat’ risky. Just 10% think it’s ‘not too’ risky, and a mere 2% see it as ‘not at all’ risky.
A year ago this month, President Trump issued an executive order allowing tokens in employer-sponsored 401(k) retirement plans. This spring, the Department of Labor issued its proposed rules to implement Trump’s EO.
But prominent labor unions soon voiced concerns about such changes, citing fears that the CLARITY Act’s loosening of regulatory oversight of digital assets could prove catastrophic for American workers’ hopes of a secure retirement. Earlier this month, the AFL-CIO’s director of government affairs issued letters to senators urging them to vote ‘no’ on CLARITY because of its capacity to “threaten our retirement accounts.”
Sheesh, somebody really needs to tell these risk-averse killjoys that YOLO.
Watch | Tokenization on Public Blockchain: Transforming RWAs and Finance
