Tokenized Deposits Fall Short Without Central Bank Settlement
Global – October 15, 2026 -- Tokenized deposits cannot settle between banks on their own, because Bank A's tokenized deposit is not automatically Bank B's money, according to a new analysis of digital money infrastructure. The receiving institution needs settlement before it can safely credit its customer.
Tokenized deposits digitize one bank's ledger but leave interbank settlement unsolved
Tokenized deposits make commercial bank money programmable while preserving the deposit model. Beyond the issuing bank, however, they need a neutral settlement asset. Across banks, that asset is central bank money, which in a tokenized system could mean tokenized reserves or wholesale CBDCs.
The proposed layered model pairs a tokenized deposit for the customer-money leg with central bank money for the settlement leg. Debit, settlement and credit must complete together.