How US banks are quietly preparing for an onchain future

"Instead, they are methodically rebuilding core financial plumbing, including payments, deposits, custody and fund administration, so these services can operate on distributed ledgers. The work is incremental, technical and often invisible to retail customers, but it is already reshaping how large institutions think about money movement and settlement. Rather than embracing unregulated crypto assets, banks are focusing on tokenization, the process of representing traditional financial claims, such as deposits or fund shares, as digital tokens recorded on a ledger."

"US banks are prioritizing tokenized versions of familiar products, including deposits, funds and custody, rather than launching new crypto-native assets. Most onchain bank activity is taking place in wholesale payments, settlement and infrastructure, largely out of public view. Regulators are increasingly allowing crypto-related banking activities, but only within tightly supervised and risk-managed frameworks. Public blockchains such as Ethereum are being tested by major banks, but exclusively through controlled and compliant product structures."

US banks are prioritizing tokenized versions of traditional products—deposits, funds, and custody—rather than launching new crypto-native assets. Most on-chain activity focuses on wholesale payments, settlement, and infrastructure, often out of public view. Banks are creating deposit tokens that represent commercial bank deposits issued and redeemed by regulated banks, enabling real-time transfers and automated settlement while staying inside regulatory frameworks. Major banks test public blockchains like Ethereum but only within controlled, compliant product structures. Regulators are permitting crypto-related banking activities when tightly supervised and risk-managed. The work is incremental, technical, and reshaping institutional views on money movement.

Read at Cointelegraph