US banks are focusing on tokenized financial products rather than cryptocurrencies.
Major US banks are strategically focusing on the "tokenization" of traditional financial products, rather than speculative cryptocurrencies. This represents a growing movement to redesign the financial system by implementing existing services like payments, deposits, custody, and fund management on blockchain.
Currently, the majority of blockchain use by US banks is focused on inter-institutional settlements and infrastructure, largely invisible to the general public. The key is tokenization. This involves converting traditional financial assets like deposits and funds into digital tokens, recording them on a distributed ledger, and operating them under regulatory control.
For example, "tokenized deposits" are fundamentally different from stablecoins issued by private companies. These are a form of digital deposit issued and redeemed by commercial banks, with JP Morgan and Citi being the main proponents.
JPMorgan and Citi enter the operational phase.
JP Morgan already operates "JPM Coin," a real-time, 24-hour settlement service for institutional clients. In 2024, it rebranded its blockchain division as "Kinexys," expanding and restructuring it into a platform for payments, tokenized assets, and programmable liquidity.
Citi also introduced deposit tokens and smart contracts to corporate finance with the announcement of "Citi Token Services" in September 2023. Starting in October 2024, the service entered the commercialization phase, with institutional clients using it for multi-million-dollar transactions.
The New York Innovation Center (NYIC), a subsidiary of the Federal Reserve Bank of New York, has also joined this trend. The Responsible Debt Network (RLN) project, involving several major banks, including BNY Mellon, Citi, HSBC, and Mastercard, conducted a payment test combining commercial bank deposit tokens with a central bank digital currency (CBDC).
BNY Mellon to Operate Bitcoin Custody Service
Custody is another key pillar of BNY Mellon's blockchain strategy. Beginning in October 2022, BNY Mellon will offer Bitcoin (BTC) and Ethereum (ETH) custody and transfer services to select institutional clients. This extends the traditional financial "vault" role into the digital asset market.
This movement coincides with a shift in regulatory stance. The Office of the Comptroller of the Currency (OCC) issued Interpretation 1170, stating that national banks can provide cryptocurrency custody services. The Federal Reserve (Fed) also outlined risk management standards for banks storing digital assets in its 2025 report.
However, regulators remain cautious. In January 2023, the Federal Reserve, the FDIC, and the Office of the Comptroller of the Currency (OCC) issued a joint statement warning that relationships with cryptocurrency companies can be risky.
MONY Fund Launches, Visibly Utilizing Public Blockchain
In December 2025, JP Morgan Asset Management unveiled MONY (MY Onchain Net Yield Fund), the first tokenized money market fund (MMF). The fund will be issued as tokens on the Ethereum blockchain and operated on the Kinexis digital asset platform. JP Morgan invested $100 million (approximately KRW 148 billion) in initial seed funding.
This fund is not a cryptocurrency-based product, but rather a digitized version of a traditional money market fund (MMF). It symbolizes the bank's strategic stance toward managing digital assets within the existing regulatory framework. The structure of simultaneously managing tokenized deposits and earnings significantly enhances the bank's potential for blockchain-based expansion.
Attempts to integrate digital intermediation capabilities into banking systems
Some US banks and market participants are also experimenting with integrating digital asset brokerage infrastructure into their systems to maintain traditional revenue models, such as trade brokerage and execution, and post-trade services. This approach differs from the decentralized nature of cryptocurrencies.
Regulations are also being adjusted accordingly. In March 2025, the OCC officially clarified that sovereign banks can conduct certain cryptocurrency-related business related to stablecoins and payment functions, and also withdrew the previously required "request for prior review." Interpretations 1172 and 1174 allow the use of blockchain for stablecoin deposit custody and payment systems, and specify the direction of supervision.
The Path from "Early Adventure" to "Institution-Centric Design"
This trend demonstrates that US financial institutions are not rushing into the cryptocurrency market indiscriminately, but are gradually adopting blockchain while maintaining existing financial and regulatory frameworks. While this is a cautious approach, given the large capital and governance requirements required, it can be interpreted as a sign that the future direction of financial infrastructure is being determined to some extent.
๐ Market Interpretation
American banks are reimagining the traditional financial system with blockchain technology. They are focusing on redesigning stable financial infrastructure rather than speculative cryptocurrencies, and are pursuing institutional blockchain adoption.
๐ก Strategy Points
- Operate 'tokenized deposits' and 'tokenized funds' within the institutional framework and dominate the institutional investment-focused market.
- Build a blockchain system based on real-world use and expand cooperation with regulatory authorities.
Attempts to maintain leadership in the digital asset market through integration of custody and brokerage infrastructure.
๐ Glossary
Tokenization: A technology that converts traditional financial assets into digital tokens.
Custody: A financial service that safely stores and manages digital assets.
- Money Market Fund (MMF): A short-term financial product that invests in safe assets such as short-term government bonds and deposits.
- Responsible Debt Network (RLN): A blockchain-based interbank payment system test project.
๐ก Want to know more? AI-prepared questions for you:
A. Instead of developing speculative cryptocurrency products like Bitcoin, major US banks are focusing on operating existing financial services on blockchain. For example, JPMorgan Chase uses a system called JPM Coin to enable institutional clients to transfer funds in real time, 24 hours a day, and Citibank is currently operating a tokenized cash service.
A. Banks are focusing on tokenization because of regulatory security and customer trust. While new cryptocurrencies carry significant risks and unclear regulations, tokenizing existing financial products can simultaneously secure legal stability and technological efficiency.
A. Yes, it's already in commercial use. JPM Coin is being used for real-time payments and settlements between institutions, and Citi's service handles millions of dollars in real-time transactions.
A. BNY Mellon has been offering custody and transfer services for Bitcoin and Ethereum since 2022. This enables a system where banks can also store and manage blockchain assets.
A. MONY is a tokenized version of a traditional money market fund, so unlike yield-generating cryptocurrency products, it adheres to existing financial regulations. This model considers both expanded institutional use and regulatory compliance.
TP AI Precautions
This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
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