TD Bank Hails “Terrific Opportunities” in Tokenized Deposits as Major Banks Accelerate Blockchain Adoption
Toronto, Jan. 28 2026 – At the recent RBC Capital Markets Canadian Bank CEO conference, TD Bank chief executive Raymond Chun signaled that the Canadian lender is placing tokenized deposits at the top of its digital‑finance agenda. Describing the technology as “real innovation” with “terrible opportunities,” Chun emphasized that the bank views tokenized deposits as a higher‑priority growth lever than crypto trading desks or stable‑coin initiatives.
What are tokenized deposits?
In the banking context, a tokenized deposit is a digital ledger entry that mirrors a client’s traditional deposit claim while simultaneously existing as a token on a (typically permissioned) blockchain network. The token is backed 1‑to‑1 by the underlying fiat balance, allowing the bank to retain full regulatory oversight and custody while leveraging blockchain’s speed, transparency, and lower settlement costs.
TD Bank’s stance
Chun’s comments underscored three perceived advantages:
- Regulatory comfort – because the token is issued by a regulated institution and fully collateralised, it fits within existing banking supervision frameworks.
- Profit‑and‑loss impact – on‑us settlement reduces inter‑bank friction and can improve margin on cash‑management services.
- Client experience – instant, traceable transfers can be offered to corporate and high‑net‑worth customers without exposing them to the volatility or custody risks associated with public‑chain assets.
“The benefits are clear from a P&L perspective and from the client’s point of view,” Chun said, adding that the bank’s focus on this product class outweighs its interest in pure‑play crypto trading or proprietary stablecoins.
A broader industry push
TD’s enthusiasm is part of a growing wave of experimentation among legacy banks:
| Institution | Recent Token‑Deposit Activity | Target Use‑Case |
|---|---|---|
| JPMorgan | Expanded its “JPM Coin” (JPMD) from a pilot on Coinbase’s Base L2 to a native issuance on the Canton permissioned network; launched a tokenized money‑market fund on Ethereum. | Institutional settlement, liquidity provision |
| BNY Mellon | Rolled out tokenized deposit representations for institutional clients, initially focusing on collateral and margin workflows. | Collateral management |
| HSBC | Deployed a tokenized deposit service in Hong Kong, with Ant International as the first corporate client for real‑time HKD/USD payments. | Corporate cash‑management |
| TD Bank | At the planning stage, prioritising tokenized deposits over other crypto‑related products. | Broad client‑facing settlement |
JPMorgan’s early foray, dating back to 2019 on its Kinexys (formerly Onyx) platform, has set a precedent that other banks are now following. The shift toward permissioned blockchains reflects a desire to capture blockchain efficiencies without relinquishing control over compliance, AML/KYC, and custody.
Market outlook
Analysts at McKinsey project that tokenization of real‑world assets could generate between $2 trillion and $4 trillion in market capitalization by 2030, depending on scenario assumptions. Tokenized deposits, as a bridge between fiat balances and blockchain infrastructure, are expected to be a substantial component of that growth, providing a regulated entry point for institutional participants.
Analyst perspective
- Operational efficiency: By moving settlement onto a distributed ledger, banks can cut processing times from days to seconds, potentially reducing operational costs and freeing up liquidity.
- Regulatory alignment: Permissioned networks satisfy supervisory requirements while still delivering many of the technical benefits of public chains.
- Competitive differentiation: Early adopters may capture market share in corporate cash‑management, cross‑border payments, and Treasury services, especially as clients demand faster, more transparent transaction records.
- Risk considerations: The hybrid model still relies on centralized issuance; any failure in the underlying blockchain platform or a breach of the permissioned network could create new operational risks that regulators will scrutinise.
Key takeaways
- TD Bank is prioritising tokenized deposits over other crypto‑related ventures, seeing them as the most promising avenue for profit and client value.
- Tokenized deposits act as blockchain‑based book entries that are fully backed by fiat deposits, marrying traditional banking regulation with settlement speed.
- Major banks (JPMorgan, BNY Mellon, HSBC) are already piloting or launching similar services, indicating an industry‑wide shift toward permissioned tokenization.
- Market forecasts anticipate rapid expansion, with tokenized real‑world assets potentially reaching multi‑trillion‑dollar valuations by the end of the decade.
- Regulatory comfort and operational upside are the primary drivers, while the hybrid model still poses governance and technology‑risk challenges that will need ongoing oversight.
As more banks experiment with tokenized deposits, the line between conventional banking and decentralized finance continues to blur, setting the stage for a new era of regulated, blockchain‑enabled financial services.
Source: https://thedefiant.io/news/tradfi-and-fintech/big-banks-explore-tokenized-deposits
