Dallas Fed economists estimate that tokenized deposits could reduce U.S. banks' capacity to hold long-term interest rate risk by about $700 billion if savers become 10% more sensitive to rates, a figure reported by Foresight News. A separate scenario puts the decline at roughly $580 billion if deposits exit banks 10% earlier.
The calculations assume deposits remain in banks for an average of four years, and that so‑called other deposits currently support about 80% of the industry’s long‑term rate exposure. The researchers say tokenized deposits would move funds on-chain, enable programmable payments and real-time settlement, and could allow yield‑seeking savers to switch banks almost instantly.
They caution that smart contracts and AI agents could automate such movements, weakening deposit stickiness and raising banks' funding costs, which could in turn influence borrowing costs for households and businesses.
A study of Brazil's Pix instant payments network found that greater use of the system has led local banks to hold more liquid assets and reduced the scale of credit intermediation. The Clearing House is developing a tokenized deposit interoperability network for cross‑bank settlement, with involvement from banks including Bank of America, Citigroup and Wells Fargo.
