The United Kingdom and other countries prefer tokenized deposits in front of Stablecoins, says JPMorgan

According to JPMorgan, Despite the rise that the stablecoins are currently having, bank and financial regulators outside the US.

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• Analysts of JPMorgan They indicate regulatory trend outside the US that favors tokenized bank deposits.
  
• The Bank of England prefers these digital instruments on Stablcoins.
  
• Despite their crypto boom, the stablcoins have risks that disturb regulators.

Financial regulators outside the United States, including Bank of Englandthey would be inclined in favor of the bank deposits tokenized as a preferred model for the future of digital finances, according to a recent report by analysts from analysts JPMorgan.

The analysis, led by the Director General Nikolaos Panigirtzoglou, and reviewed by The Blockpart of recent statements of the governor of the Bank of EnglandAndrew Bailey. He expressed to be in favor of banks to offer tokenized deposits instead of issuing their own stablecoins, a position that could reflect a broader regulatory trend internationally.

What are tokenized deposits?

Tokenized deposits are traditional bank deposits recorded in infrastructure Blockchain. They retain the guarantees of conventional deposits – such as the support of deposit insurance, capital requirements and regulatory compliance with money laundering prevention (AML) and customer knowledge (KYC) -, while gaining interoperability and programmable capacity thanks to the underlying technology of cryptocurrencies.

There are two types of tokenized deposits: to the bearer (transferable, similar to stablecoins) and Not the bearer (not transferable, liquidated between banks to nominal value). According to JPMorgan, Regulators show greater interest in the non -bearer version, since this helps preserve the “Uniqueness of money”, A key principle that guarantees that all forms of money are interchangeable to the same nominal value.

The risks of the stablecoins and carrier deposits

According to analysts, Both stablecoins and carrier tokenized deposits are subject to fluctuations in value due to market factors such as credit risk of the emitter or liquidity imbalances. Recent examples of these disruptions include crises around Terra, FTX and Silicon Valley Bank.

In a study cited by analysts –“Stablecoins versus Tokenized Deposits: Implications for the Singleness of Money”by Garratt and Shin (2023) – it is argued that Carrier deposits could behave as cryptoactive whose value fluctuates, undermining the stability of the financial system.

In contrast, non -transferable tokenized deposits, when using money from the Central Bank for liquidation between banks, maintain the nominal value in transactions, strengthening confidence in the “Uniqueness of money.”

Stablecoin have more demand in the market

Despite emerging regulatory preferences, Stablecoins continue to dominate the crypto ecosystem thanks to their liquidity and ease of transfer. According to JPMorgan, This gives them an advantage over the tokenized deposits not to the bearer, which still lack mass adoption and efficient transfer mechanisms.

However, analysts point out that money does not completely abandon the banking system by moving to Stablecoins. Like the monetary market funds, Stablecoins reserves are generally recycled in assets such as bonds of the Treasure, remaining within the broader financial system.

The report also raises doubts about the economic viability that banks issue Stablcoins under certain regulatory proposals. For example, a document of the 2023 Bank of England suggests that Banks should maintain reservations in the Central Bank to support their stablcoins, without receiving interests for these reservations.

This approach would be unattractive by the emission of Stablecoins for banks, since it would reduce its ability to generate performance from customer deposits.

The contrast with the United States

Meanwhile, in the United States, President Donald Trump prepares to sign the law Genius Act, a regulation approved yesterday by the House of Representativeswhich would allow banks to emit Stablecoins and promote their use in daily payments. This measure contrasts with the caution posture of British and European regulators.

In this context, JPMorgan has launched a pilot project of tokenized deposit currency JPMD, network -based Base (Layer 2). The entity submitted a registered trademark application for JPMD in June, pointing out multiple cases of potential use.

This development shows how larger banking institutions explore both alternatives: tokenized and stablecoins deposits, while regulators draw the way for a safer and efficient money digitalization.

Article written by a content editor. Edited by Angel Di Matteo / Diariobitcoin

Original image of Unspash, edited with Canva

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