The news: Wells Fargo will launch tokenized deposits for corporate and commercial clients this fall, letting them transfer, program, and settle funds around the clock, per The Wall Street Journal. The product will initially support cross-border payments using US dollar– and British pound–denominated tokenized deposits on Wells Fargo’s proprietary blockchain platform.

Zooming out: Wells Fargo is racing to catch up with rivals that already use tokenized deposits to win and retain corporate accounts. For example, Citi recently gave wealthy and institutional clients a way to trade private company shares on a blockchain. 

Wells Fargo is joining JPMorgan, Citigroup, and Bank of America in building a shared tokenized deposit network, set to launch next year through the bank-owned Clearing House. The network is intended to be available to banks across the US, potentially allowing regional and community banks to participate in tokenized deposits without each building a stand-alone blockchain network.

Why it matters: Stablecoins threaten a core piece of banks’ business, so banks are moving to stay ahead of them. By offering tokenized deposits, they can match many of stablecoin’s speed and efficiency benefits while keeping customer funds within the banking system, protecting deposit funding and preserving their role in payments and treasury management. 

According to Arizent Research and American Banker, 53% of banks are prepared to support tokenized deposits, meaning this may be less of a competitive differentiator over time

Implications for banks: Corporate treasury relationships are becoming competitive, and banks are using tokenized deposits to defend them. Wells Fargo's proprietary build, paired with a commitment to interoperate with the shared Clearing House network, signals the desire for an individual edge with clients now and a collective defense against crypto-native payment rails later. Banks that delay risk losing corporate clients to competitors who can already offer 24/7, programmable settlement.

The key question is whether tokenized deposits can hold ground against stablecoins as regulation matures. For now, tokenized deposits carry the same deposit protections as standard bank deposits, an advantage stablecoins lack. 

This content is part of EMARKETER’s subscription Briefings, where we pair daily updates with data and analysis from forecasts and research reports. Our Briefings prepare you to start your day informed, to provide critical insights in an important meeting, and to understand the context of what’s happening in your industry. Non-clients can click here to get a demo of our full platform and coverage.