Banks focus on tokenisation and interoperability
Tokenisation has the potential to make money move instantaneously and with fewer steps in between, which is a significant development for the financial industry. At the upcoming Sibos 2026 conference in Miami, industry developments will be front and centre, with sessions focusing on core integrations, trust and security, and the benefits of tokenisation.
Deutsche Bank, one of the attendees, is making headway with tokenisation, having completed one of the first live transactions during Project Agorá’s real-value testing phase. The bank’s global product and market management head, Ciarán Byrne, says the focus is shifting from securities to money itself, with the greatest value emerging in the tokenisation of money.
Innovation and Interoperability
Byrne notes that the risk of system isolation is a concern and that interoperability is necessary, with many initiatives being developed in parallel. “The risk is that we create a series of digital islands rather than a connected ecosystem,” he says. Deutsche Bank is actively engaged in several high-profile projects, including Project Guardian with the Monetary Authority of Singapore and Project Agorá, led by the Bank for International Settlements.
JP Morgan is another bank making significant strides in tokenisation, having processed over $4 trillion in blockchain transactions since launching its Kinexys platform in 2015. The bank’s global head of market development, Kara Kennedy, says demand for tokenisation infrastructure is being driven by corporate clients operating around the clock, with cash and liquidity management being a leading use case.
Citi is also betting on tokenised money, with its Token Services using a private permissioned blockchain to enable tokenised liquidity transfers. The bank’s head of partnerships and innovation, Bis Chatterjee, says the direction of development is towards “borderless, always-on, and real-time” financial networks, but adds that the bigger breakthrough will come when individual bank networks start connecting to one another.
Tokenised Deposits and Interoperability
HSBC is among 17 institutions working with Swift on its blockchain-based ledger, designed to support tokenised deposit payments between participating banks. The bank’s global head of digital currencies, Lewis Sun, says tokenised deposits offer banks new capabilities without abandoning the protections associated with commercial bank money, but notes that real-world adoption is not simply a technical issue, with regulatory considerations and market understanding also playing a role.
BNP Paribas’s digital assets market and client engagement lead, Wayne Hughes, says the industry is still in the early days of tokenisation, with the focus on building foundations for the future of capital markets. The bank has been testing the business case, having issued a tokenised share class of an existing French money market fund on Ethereum through its AssetFoundry platform.
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Hughes believes the hurdle facing the wider industry is now less about proving that tokenisation is technically possible and more about demonstrating “meaningful near-term value”, with fund distribution and collateral mobility being areas where tokenisation could remove existing friction. He also stresses the importance of interoperability, saying that different networks and solutions need to be able to work together at scale.
BNY has enabled on-chain representations of client deposit balances on its Digital Assets platform, initially targeting collateral and margin workflows. The bank’s head of commercial, global payments, and trade, Carl Slabicki, sees these developments as part of something much bigger than the blockchain, with tokenisation having the potential to make financial services more available, more programmable, and more synchronised with an always-on economy.
Slabicki says that tokenisation cannot develop as an island alongside the rest of the financial system, with traditional infrastructure, instant payment rails, tokenised bank liabilities, and digital assets all advancing at the same time. “The opportunity is unlocked when these systems become interoperable across banks, market infrastructures, and ecosystem participants,” he says, as the industry looks to move beyond the proof-of-concept era and into production deployments.
The ledger is designed to facilitate the transfer of tokenised deposits between participating banks, with the goal of creating a more efficient and secure payment system.
The use of blockchain technology is also being explored by other banks, with HSBC’s DLT Settlement Utility being used to link blockchain networks with fiat settlement rails. This solution is seen as strategically important for the bank’s continued success with tokenisation, with Sun noting that it will play a key role in enabling the bank to move beyond single bank platforms and become part of a shared settlement layer.
Production Deployments
The proof-of-concept era for tokenisation has demonstrated that money, funds, and other assets can be represented and moved on-chain. Production deployments are now showing that the technology can support real financial activity, with banks such as JP Morgan and Citi having already processed significant volumes of blockchain transactions. The next step will be to scale these deployments and achieve interoperability between different systems and networks.
