Institutional Tokenization Strategy

How the institutional 'tokenized money stack' emerges: stablecoins + tokenized deposits + tokenized funds

Tokenized money is money recorded as a token on a programmable ledger. Institutions use three forms side by side: stablecoins, tokenized bank deposits and tokenized money market funds.

Summary

Tokenized money is money that exists as a token on a programmable ledger. It moves 24/7 and can be written into smart contract logic such as delivery-versus-payment, which is what people usually mean by programmable money. Institutions use it in three forms: stablecoins backed by issuer reserves, tokenized deposits issued by banks, and tokenized money market fund shares that hold Treasuries and pay a yield.

How it works

Each form now has large, named issuers. SG-FORGE, Societe Generale's digital asset subsidiary, has issued the euro stablecoin EURCV since April 2023. It added the dollar stablecoin USDCV in June 2025, and both are MiCA-compliant e-money tokens. J.P. Morgan made its USD deposit token, JPM Coin (JPMD), available to institutional clients on the Base blockchain in November 2025. Tokenized Treasury money market products reached $14.94 billion as of 24 September 2026, led by Circle's USYC, Ondo's USDY and BlackRock's BUIDL (rwa.xyz).

A stablecoin is a token redeemable at par for a fiat currency and backed by reserve assets that the issuer holds. It works like a bearer instrument, so whoever holds it in a compatible wallet can pass it on. That makes stablecoins the default cash leg on public chains and between parties that do not share a bank. The holder's claim is on the issuer and its reserves. SG-FORGE, for example, holds USDCV reserves with BNY as custodian. The market is large enough that reserve management is now a business of its own. CoinDesk reported in August 2026 that BlackRock manages about $60 billion of Circle's reserves, around a quarter of a $300 billion stablecoin market.

A tokenized deposit is an ordinary bank deposit recorded as a token. It remains a liability of a regulated bank and generally moves only between clients the bank has already onboarded. J.P. Morgan describes JPM Coin as a USD-denominated deposit token that represents deposits at the bank and gives near-instant 24/7 settlement with "the security of bank-backed deposits". The trade-off is reach. A deposit token is useful only to counterparties who can hold an account at that bank.

A tokenized money market fund share is a claim on a fund's assets, not on a bank or an issuer's reserves. It earns the yield of the T-bills and repo underneath, which makes it the obvious place to park idle on-chain cash and to post as collateral. It is also a security, so holders are whitelisted and redemptions follow fund rules. In August 2026 BlackRock said two new tokenized vehicles intend to qualify as reserve assets for U.S. payment stablecoin issuers under the GENIUS Act. That puts fund shares underneath stablecoins rather than beside them.

Side by side, the three forms differ in credit risk, reach and yield. A stablecoin is a claim on an issuer's reserves and can reach anyone the issuer and the chain allow. A tokenized deposit is a claim on a bank and stays within that bank's client base. A tokenized fund share is a claim on Treasury assets, pays the money market yield and is open only to eligible investors. Stablecoins and deposit tokens are payment instruments. The fund share is an investment that can act as collateral.

The Bank for International Settlements has been the sharpest critic of the stablecoin form. Its 2025 Annual Economic Report sets three tests for money: singleness, elasticity and integrity. It concludes that stablecoins fail all three. Singleness means money settles at par and is accepted "no questions asked". Tokens from different issuers can trade at different rates, so a dollar stablecoin is not always worth exactly a dollar. The BIS proposes instead a "tokenised trilogy" of central bank reserves, commercial bank money and government bonds on a unified ledger, which sits closer to the tokenized deposit model. In the market the forms are converging, with fund shares now positioned as stablecoin reserves.

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