Deposit tokens are a digital representation of bank deposits, tokenized on a blockchain at a 1:1 ratio.


Designed as a form of digital currency issued by banks, deposit tokens allow claims on bank deposits to be transferred and settled over a distributed ledger. This structure preserves the stability and regulatory framework of traditional deposits, while offering the technological benefits of blockchain, such as 24/7 real-time settlement and smart contracts—automated execution of agreements when predefined conditions are met.


Deposit tokens are distinct from "bank-issued stablecoins," which are electronic currencies separately issued and collateralized by various assets, including government bonds and cash, beyond just deposits.


When a payment or remittance occurs using deposit tokens, funds are immediately settled and redeemed between banks, mirroring the process of conventional deposit clearing and settlement. In contrast, bank-issued stablecoins can be repeatedly used and circulated until a direct redemption request is made, similar to bearer negotiable certificates of deposit.


Both products are issued based on bank deposits or other deposit products, ensuring their effectiveness as a means of payment.


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