Bank of England: Tokenised Deposits Overtake Stablecoins

Bank of England policymaker Megan Greene stated that tokenised deposits are expected to replace stablecoins within five years as commercial banks aim to protect their traditional deposit bases.
The comment was made at a conference in Dubrovnik, Croatia, where Greene highlighted that digital versions of traditional bank deposits could become the dominant form of digital money.
Greene observed that stablecoin issuance has levelled off recently, but she acknowledges a market exists for central bank digital currencies (CBDCs), stablecoins, and digital deposits, with tokenised deposits likely to win out.
Christopher Waller, a U.S. Federal Reserve policymaker on the same panel, offered a contrasting view, defending stablecoins as a financial innovation that can reduce costs and warning against overly restrictive regulation.

Anticipated shift from stablecoins to tokenised deposits may reduce demand for stablecoin‑linked assets, potentially pressuring prices of stablecoin issuers and related crypto firms.
Banks and fintech companies positioned to offer tokenised deposit services could see positive sentiment and share price appreciation.

Traditional banks, especially those investing in digital infrastructure, may benefit from new tokenised deposit products.
Crypto exchanges and stablecoin issuers could face headwinds as investor interest pivots toward tokenised deposits.
FinTech firms developing tokenisation platforms may experience increased demand.

The outlook may attract foreign investors to banks and fintechs developing tokenised deposit solutions, while potentially diverting capital away from pure‑play stablecoin projects.

No direct references to interest rate changes, inflation control, or liquidity measures were made in the remarks.

Greene’s comments reflect a broader central‑bank interest in digital money formats, aligning with ongoing discussions about CBDC development and the future of digital payments.