JPMorgan has moved over $3 trillion through its Kinexys platform, while Citi Token Services processes billions of dollars in cross-border payment transactions daily. The scale of this fund turnover confirms that blockchain adoption on Wall Street is already underway. However, all of this major banking infrastructure operates within closed (permissioned) networks connecting only corporate clients and internal interbranch transfers, without opening doors to everyday savings account holders.
That access gap is now beginning to be dismantled by challenger banks outside Wall Street’s inner circle.
Why Major Banking Systems Remain Closed
JPMorgan and Citi’s decision to restrict access to the institutional tier is closely linked to the legal structure of the products they issue. Tokenized deposits differ from standard stablecoins in the crypto market. These assets maintain their status as direct claims on legal deposits on official bank balance sheets, complete with all binding banking regulatory protections.
While providing legal certainty for corporate clients, this exclusive model introduces new operational hurdles. Lynq Network CEO Jerald David highlighted the capital inefficiencies currently burdening institutional treasury desks. Fund managers must run three separate infrastructures simultaneously: JPMorgan’s tokenized deposits, regulated stablecoins, and conventional correspondent accounts. This three-track split leaves institutional liquidity fragmented across five different networks.
Monument Bank Opens Interest-Bearing Deposits for Retail
Seeing tokenization technology confined to the corporate tier, Monument Bank is taking the opposite path. The UK challenger bank, with a balance sheet of around $2.4 billion, has partnered with privacy-focused blockchain Midnight. The collaboration, initiated by founder Mintoo Bhandari, aims to launch regulated, yield-bearing tokenized savings products directly for individual customers. Users are not required to navigate the technical complexities of crypto wallets to access these savings instruments.
Mintoo Bhandari stated that 99% of conventional banking worldwide remains locked in legacy technology architecture from the 1970s. This reliance on decades-old infrastructure makes it difficult for incumbent banks to deliver genuine innovation beyond cosmetic redesigns of mobile banking apps. The partnership with privacy blockchain Midnight is positioned as an effort to overcome those legacy technological constraints.
For everyday savers, this initiative signals a new direction for digital ledger adoption: banking settlement efficiencies are no longer confined to institutional treasury departments, but are beginning to reach everyday savings yields.
Source: CoinDesk.
Read also: What Is DeFi (Decentralized Finance)?
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
