Bank Deposit Token
Pronunciation: BANK dih-POZ-it TOH-kun
Also known as: Tokenized Bank Deposit, Tokenised Deposit
Definition
A bank deposit token is a digital token representing a claim on a deposit liability of a regulated bank. It is typically denominated in sovereign currency and may be transferred on a distributed ledger under bank-controlled rules. Unlike many stablecoins, the holder’s claim is generally connected to commercial bank money and the issuing bank’s balance sheet, so redemption, access, settlement, and deposit protection depend on the legal and operational design.
Overview
How it works and where it fits
A bank deposit token represents commercial bank money in tokenized form. Economically, it is intended to preserve the character of a bank deposit while allowing the claim to be recorded or transferred through programmable ledger infrastructure. The issuing bank remains the debtor, and the token holder or participating customer has a claim governed by account terms, banking law, and the platform’s rules. This differs from a generic fully reserved stablecoin, whose issuer may be a non-bank entity holding a separate reserve portfolio.
Designs vary. A token may be issued directly against an existing deposit, created when funds move from a conventional account into a tokenized account, or used only inside a permissioned network. Transfers can involve changes to the bank’s deposit ledger, movement of tokens between approved addresses, or coordinated settlement across multiple banks. The token may include identity controls, transfer restrictions, recovery procedures, and transaction limits that are uncommon in permissionless tokens.
For businesses, deposit tokens can support programmable payments, intraday treasury movements, delivery-versus-payment, and settlement between approved institutions. Their usefulness depends on convertibility at par with ordinary bank deposits and on interoperability with other forms of money. A payment system must understand who can hold the token, when redemption is available, whether transfers are final, and whether the token is accepted outside the issuing bank’s network.
The term should not be treated as interchangeable with bank-issued stablecoin or central bank digital currency. A deposit token is specifically linked to a commercial bank liability. Credit exposure to the bank, legal ownership, insolvency treatment, and any deposit-insurance coverage remain important. Technical tokenization does not by itself guarantee singleness of money, universal acceptance, or risk-free settlement across institutions.
Related glossary concepts
Token Pause Authority; Tokenized Deposit; Token Transfer Restriction
Primary reference
BIS: Pushing the monetary frontier: stablecoins and tokenised deposits
Example
A regulated bank issues a token representing a claim on its deposit liability to an eligible customer. A payment between two approved participants updates records according to the bank's rules. The token's backing and redemption come from the issuing bank's legal obligation, not automatically from cash held in a segregated non-bank stablecoin reserve.
Comparison
Deposit-insurance eligibility, transfer finality, permitted holders and interoperability depend on the jurisdiction and product structure. Bank credit exposure remains relevant. Distinguish a commercial bank deposit token from central bank digital currency and an independently issued stablecoin; similar one-dollar prices do not imply identical legal rights.
Key Takeaway
A bank deposit token represents a commercial-bank claim whose legal terms remain decisive.
Sources
- Stablecoins versus Tokenised Deposits: Implications for the Singleness of Money — Bank for International Settlements (2026-08-02)
- Considerations for the Use of Tokenisation in the Context of Money and Other Assets — Bank for International Settlements (2026-08-02)
- The Next-Generation Monetary and Financial System — Bank for International Settlements (2026-08-02)