Are Banks Ready for a Broad Shift to Digital Money?

In June 2026 a consortium of 140 firms, including Visa, Mastercard, BlackRock and Stripe, launched Open USD, a shared stablecoin network. In the same month The Clearing House announced a bank-led tokenised-deposit network with participation from JPMorgan, Citi, Bank of America and Wells Fargo. SoFi added a stablecoin to its mobile app, and remittance firms Western Union and MoneyGram began issuing dollar tokens across their networks.

European central banking infrastructure is evolving in parallel. The European Central Bank plans to move wholesale central bank money onto distributed ledger technology, with its Pontos settlement service scheduled for rollout in the third quarter of 2026. The retail digital euro is set to enter pilot testing in 2027.

Regulatory work is active in multiple jurisdictions. In the United States, proposals under the GENIUS Act are under discussion. Europe has the Markets in Crypto-Assets framework, and the United Kingdom has established a systemic stablecoin regime. These rulebooks include provisions on issuer responsibilities, reserve backing, consumer protections and interoperability standards.

Market participants are using three distinct digital-money layers. Stablecoins issued on public or consortium chains are being used for retail cross-border payments and remittances. Bank-issued tokenised deposits are ledger-based representations of deposit liabilities intended to support on-ledger settlement and intraday liquidity while remaining bank liabilities. Wholesale central bank digital currencies are being tested for interbank settlement and high-value transactions where central bank money and legal finality are required.

Implementing these rails requires changes to bank technology and operations. Payment hubs must connect to multiple on-chain and off-chain systems, including tokenisation engines that create and redeem digital assets and custody and wallet services for secure key management. Ledger and smart-contract integration is needed for automated settlement, and real-time liquidity and balance bookkeeping must tie back to core banking systems. Treasury functions need tooling for cross-rail netting, token convertibility and intraday funding. Compliance teams must extend KYC and sanctions screening to cover on-chain transaction monitoring and new participant models.

The digital-money layers affect deposit bases in different ways. Tokenised deposits remain commercial bank liabilities and keep funds on bank balance sheets while moving settlement processes onto new technology stacks. Stablecoins issued by non-bank entities can route customer transactional balances into private rails and payment apps. The design of retail CBDCs will determine whether households hold central bank money via accounts at commercial banks or directly at the central bank, affecting how commercial deposits are used.

Banks and service providers have announced plans to connect legacy systems to token rails, offer custody and liquidity services, and join network governance groups. RedCompass Labs has released data and convened industry discussions mapping the current state of digital-money readiness and detailing infrastructure and operational requirements for banks that choose to engage with stablecoins, tokenised deposits and CBDCs.