Bank blockchain isn’t a hype cycle anymore. In 2024–2025 we’ve seen production-grade rails for tokenized cash, collateral, and funds, alongside CBDC pilots for wholesale settlement and cross-border payments. Central banks, market infrastructures, and the world’s largest asset managers are converging on the same thesis: tokenized money + tokenized assets on shared ledgers reduce settlement frictions and unlock new products.
The strategic drivers (why banks are expanding on-chain)
1) Instant settlement and collateral mobility
Distributed ledgers let banks move value atomically (DvP/PvP) and 24/7, shrinking intraday liquidity needs. The BIS’s blueprint calls for a “unified ledger” that brings central bank reserves, tokenized deposits, and tokenized assets into one programmable venue—precisely to capture these efficiencies.
2) Real cross-border progress (beyond messaging)
Project mBridge—a multi-CBDC platform with the HKMA, PBOC (PBCDC), BoT, CBUAE and others—hit MVP in mid-2024 to support instant cross-border payments and settlement among participating central and commercial banks.
3) Interoperability with existing rails
SWIFT demonstrated that its network can orchestrate tokenized value across multiple public and private blockchains, indicating a path to scale without forcing banks onto a single chain. SWIFT also said it would trial live tokenized/CBDC transactions to bridge into existing payment systems.
4) Proven, revenue-adjacent use cases
Tokenization is no longer a lab demo. BlackRock’s BUIDL (tokenized US-dollar liquidity fund) launched in March 2024 and surpassed $1B AUM by March 2025, a marquee signal for on-chain treasuries. Meanwhile, J.P. Morgan’s Kinexys stack (Onyx) reports multi-billion daily processing across digital assets/payments, and JPM Coin has handled ~$1B daily (2023–2024).
5) Regulatory clarity narrowing the risk premium
Rules and sandboxes now give banks defined lanes to operate: EU MiCA phased in from Dec 30, 2024; the UK Digital Securities Sandbox opened in Sept 2024; Basel finalized disclosure templates for crypto exposures (live Jan 2026). These frameworks don’t solve everything—but they materially reduce policy uncertainty.
What banks are actually doing (and why it matters)
Tokenized funds & deposits (buy-side liquidity goes on-chain)
- BlackRock BUIDL issues a transferable token that pays daily yield on-chain while holding cash, T-bills and repos; the fund crossed $1B AUM in 12 months.
- UBS AM (uMINT) launched a tokenized USD money market fund in Singapore under Project Guardian, issued on Ethereum.
- MAS Project Guardian published 2025 guidance on tokenized bank liabilities and shared-ledger designs for FX/transaction banking—clarity that directly supports bank deposit-tokens.
Intraday repo & collateral networks (balance-sheet efficiency)
- Kinexys / Onyx Digital Assets enables intraday repo and a Tokenized Collateral Network to transfer collateral ownership without moving it on legacy ledgers, keeping clients invested while mobilizing assets. Public materials cite >$2B average daily activity across the platform and trillions processed since launch.
Precious metals & digital bonds (bank-manufactured RWAs)
- HSBC Orion issues digital bonds and the HSBC Gold Token, which HSBC extended to retail in Hong Kong; in 2024 the bank piloted quantum-safe tech for secure tokenized-gold transactions.
The policy tailwinds enabling scale
Europe: MiCA goes live in stages
MiCA set EU-wide rules for issuers and CASPs; core obligations for most crypto-assets/CASPs started Dec 30, 2024 (after earlier stablecoin provisions). This harmonizes disclosures, conduct, and supervision—vital for banks interacting with tokenized assets.
United Kingdom: live Digital Securities Sandbox (DSS)
The Bank of England and FCA launched the DSS (policy + guidance Sept 30, 2024) so FMIs and market participants can issue, trade, and settle securities on DLT under tailored rules—accelerating the shift of bonds and funds to tokenized rails.
Prudential lens: Basel crypto exposure standards & disclosures
The Basel Committee locked in standardized disclosures for banks’ crypto exposures with a Jan 2026 application date and continues refining the prudential standard—giving supervisors a consistent view into bank-on-chain risk.
Asia examples: stablecoin and tokenization regimes
Japan’s amended Payment Services Act (effective June 2023) limited stablecoin issuance to banks, trust companies, and licensed transfer providers, anchoring bank-grade fiat tokens. Singapore finalized a stablecoin framework (Aug 2023) for SGD/G10-pegged single-currency stablecoins, further supported by Project Guardian pilots.
Interoperability is the make-or-break (and it’s improving)
Banks don’t want “yet another silo.” SWIFT’s 2023 experiments showed its network can bridge tokenized assets across multiple blockchains, and in 2024 SWIFT said it would trial live tokenized/CBDC transactions linking digital platforms with the existing payments universe. That keeps client UX familiar while the plumbing evolves.
Risks and constraints (why rollout is measured, not explosive)
- Operational & legal complexity: New workflows (key management, finality, programmability) meet old obligations (KYC/AML, settlement finality law, insolvency remoteness).
- Prudential capital / disclosures: Final Basel templates (2026) and regional rules (e.g., EU CRR III) mean on-chain businesses will be capital-aware from day one.
- Stablecoin vs tokenized deposits: Central banks (BIS) favor tokenized bank money over third-party stablecoins to preserve the singleness of money and access to central bank settlement.
What to watch next (2025–2026)
- Wholesale CBDC pilots (e.g., mBridge) moving from MVP to broader participant sets and higher throughput.
- Securities & funds issuance inside the UK DSS and EU pilots shifting primary-market workflows fully on-chain.
- Enterprise tokenization at scale: more blue-chip funds (post-BUIDL), repo/TCN expansions, and bank-issued deposit tokens for commercial use cases (FX, cash management).
Frequently asked questions
Is this just crypto by another name?
No. Many bank projects use permissioned ledgers and bank-issued money (deposits), and central banks are testing wholesale CBDC for settlement. The focus is efficiency and programmability, not speculative tokens.
Why are funds the early hit use case?
Money-market and short-duration funds translate well to tokens: 24/7 transferability, on-chain collateral, and automated payouts (e.g., BUIDL’s daily accrual). Institutional demand for tokenized cash-like yield has been the beachhead.
Will legacy rails go away?
Unlikely. The most credible path is interoperability—connecting tokenized platforms to existing RTGS and payment networks (e.g., SWIFT) rather than replacing them overnight.
