Tokenized deposit

A tokenized deposit is commercial bank money taken onto a blockchain. The bank issues tokens that represent existing deposit balances, and clients, typically institutional, use them for native on-chain payments with fast settlement. They can be deployed on public or permissioned networks. As a deposit liability of a regulated bank, they can accrue interest for the holder on the underlying deposit.

The difference from a stablecoin is the key point. A tokenized deposit is the deposit liability of a regulated bank and can pay interest to the holder. A stablecoin is a token backed by reserves managed by the issuer, and the yield on those reserves is usually retained by the issuer, not the holder. In the EU, fiat stablecoins fit as EMT under MiCA, while a tokenized deposit follows the banking regime. It should also be distinguished from a CBDC, which is central bank money rather than commercial money.