Tokenized Deposits vs Stablecoins vs CBDC
Three families of digital-money arrangements with different legal claims, access rules and operational designs. The answer depends on the specific issuer, scheme and jurisdiction.
By Anton Titov, Founder · Plexo Institute
A tokenized deposit, stablecoin or CBDC label is not enough: identify the legal claim, issuer, permitted users, protection, operating rules and settlement route.
“Tokenized deposit”, “stablecoin” and “CBDC” describe different arrangements. The legal claim and operating route still have to be checked.
Reading Guide
Four moves that distinguish three instruments trad-fin readers consistently conflate.
Tokenized deposit: a bank-issued arrangement whose legal claim, deposit protection, transferability and ledger design depend on the issuing bank, agreement and jurisdiction.
Stablecoin: a token arrangement whose issuer, holder claim, reserves, redemption and regulatory treatment must be checked for the specific product.
CBDC: a central-bank digital-money arrangement whose users, legal status, access and operating model depend on the relevant central bank.
The labels do not decide the use case. An operator must compare the specific legal claim, permitted users, protection, settlement finality, operating hours and cross-border route.
J.P. Morgan reports Kinexys Digital Payments activity for its institutional offering, and Citi describes Token Services for Cash as a live commercial solution for institutional clients. Project Agora is a public-private research project, not a finished payment product. Those disclosures establish named examples; they do not establish a market-wide standard.
A bank-issued arrangement may use permissioned access and transfer value within a participating scheme. A public-chain stablecoin may be transferable between compatible wallets. Either route can still involve issuers, banks, exchanges, compliance checks, liquidity providers, operating cut-offs and local-law constraints.
The practical comparison is route-specific: who may hold and redeem the instrument, who provides liquidity, what happens on failure, and which legal and settlement arrangements apply.
Retail and wholesale CBDC arrangements have different users, legal structures and operating models. Their relationship to a stablecoin route depends on the actual corridor, access rules and the central bank’s design.
BIS describes mBridge as an MVP enabled for real-value transactions subject to jurisdictional preparedness, while Project Agora is a public-private project. These labels do not establish broad commercial availability or a completed substitute for any stablecoin route.
A central-bank settlement arrangement can change the settlement asset and counterparty structure where it is actually available. It does not by itself remove FX, legal, access, operating or cross-border dependencies.
A design may use bank-issued arrangements at customer legs, a tokenised settlement asset in transit, or central-bank arrangements where a permitted corridor supports them. Each decision requires current evidence about legal claims, participation, liquidity, operating hours, compliance and settlement finality.
This is a design possibility, not a prediction that every operator will integrate all three or that a named instrument occupies one fixed layer.
The Three Instruments at a Glance
A comparison checklist for a named arrangement and route.
The labels are a starting point, not a completed risk analysis. For any specific arrangement, verify the legal claim, issuer, asset or balance-sheet support, customer protection, access terms, operating model, production status and cross-border route.
| Property | Tokenized deposit | Stablecoin | CBDC |
|---|---|---|---|
Legal claim | Check the issuing bank, customer agreement and jurisdiction | Check issuer terms, token contract and applicable regime | Check the central-bank instrument and applicable legal framework |
Protection | Deposit protection and insolvency treatment are jurisdiction- and product-specific | Reserve, segregation and redemption protections are product- and regime-specific | Legal protection and access depend on the CBDC design and jurisdiction |
Access | Defined by the issuing bank and scheme | Defined by issuer terms, token deployment and intermediaries | Defined by the central bank and authorised intermediaries |
Yield and supply | Depend on bank terms, regulation and balance-sheet design | Depend on issuer terms and applicable product rules | Depend on the central-bank design and policy framework |
Operating status | Verify the named product’s current production scope and users | Verify the named issuer, token-chain form and route | Distinguish live use, limited deployment, pilot, MVP and research |
Cross-border route | Verify participating banks, legal arrangements and settlement process | Verify issuer, token-chain, liquidity, off-ramp and compliance path | Verify corridor participation, access conditions and current operating status |
Tokenized Deposits
A bank-issued digital arrangement whose legal claim and operational design must be identified in the governing documents.
A tokenized-deposit arrangement is generally designed to represent a claim connected to a bank deposit on a ledger. Whether a holder has the same legal claim, deposit-protection treatment, transfer rights and insolvency treatment as for another deposit must be established from the issuing bank’s documents and the applicable jurisdiction.
The Claim Changes Before The Rail Does
Tokenized deposits stay bank liabilities even when the movement happens on a ledger.
Commercial bank liability boundary
- Depositcustomer holds a claim on the bank
- Tokenizeledger record mirrors the same claim
- Transferpermissioned movement changes holder, not issuer
- Redeemclaim returns to ordinary deposit form
The rail can look token-like while the claim stays bank money.
The ledger changes movement, not the issuer identity or liability category.
J.P. Morgan Kinexys: J.P. Morgan describes an institutional digital-payments and deposit-token offering; its current scope and volumes are the bank’s reported figures.
Citi Token Services: Citi described Token Services for Cash as moving from pilot to a live commercial solution for institutional clients in 2024.
Project Agora: a BIS-led public-private project exploring cross-border tokenised commercial-bank deposits and wholesale central-bank money; it is not a finished product.
These examples are not interchangeable. Before treating any named service as usable, confirm its participating entities, customer eligibility, currency, ledger, transfer rules, legal terms and current operating status.
The labels point to different questions, not a universal legal result. For a tokenized-deposit arrangement, inspect the issuing bank, customer agreement, ledger rules and applicable deposit or insolvency regime. For a stablecoin, inspect the issuer, holder terms, reserves, redemption process, token deployment and applicable regime.
A holder may have a claim against a bank, an issuer, an intermediary or another party depending on those documents. “Deposit” and “stablecoin” therefore cannot be used as shortcuts for insurance, balance-sheet exposure, redemption certainty or regulatory treatment.
The practical implication is to test the actual route: eligible users, onboarding, transfer controls, settlement process, liquidity, legal recourse and failure handling.
Stablecoins
Commercial issuer money: not a bank, not a central bank, and increasingly a regulated payment category.
Stablecoin arrangements are generally issued by commercial entities rather than central banks. Their legal status and protections vary by issuer, product and jurisdiction. Frameworks such as MiCA and the GENIUS Act set rules for defined arrangements; they do not make every token compliant or establish identical rights for every holder.
A public-chain stablecoin may be transferable between compatible wallets without the same account relationship as a bank-issued arrangement. Actual access still depends on issuer terms, token contract, wallets, intermediaries, sanctions and local law.
Markets can quote or convert different stablecoins, but that is not native legal interoperability or a guarantee of execution. Tokenized-deposit and CBDC arrangements can also offer different interoperability or operating-hour models depending on their design.
The relevant comparison is not an absolute feature list. It is whether the specific issuer, network, counterparties and legal route meet an operator’s access, control, liquidity and settlement requirements.
CBDC
Central bank money in digital form, with retail and wholesale forms that are often confused.
A CBDC is a digital form of central-bank money. Retail and wholesale designs can differ in intended users, legal form, intermediaries, privacy, operating rules and availability. For an institutional payment route, the relevant question is whether a particular wholesale arrangement actually admits the parties and currency involved.
| Property | Retail CBDC | Wholesale CBDC |
|---|---|---|
Typical intended users | May be designed for the public through a central bank and/or intermediaries | May be designed for eligible financial institutions |
Status to verify | Named jurisdiction, legal basis, rollout scope and current user access | Named corridor, participants, currency, legal arrangements and current operating status |
Cross-border question | Whether the design permits a relevant cross-border route | Whether the relevant institutions and currencies are admitted to a live or limited arrangement |
Comparison with stablecoins | Compare user access, legal claim, conversion path and operating constraints | Compare settlement asset, participant access, governance, FX and liquidity conditions |
Retail and wholesale CBDC designs create different comparison points. A retail arrangement may be relevant to a consumer or domestic-payment use case; a wholesale arrangement may be relevant where eligible institutions, currencies and a permitted corridor overlap with an operator’s route.
mBridge reached MVP stage in 2024, and BIS says the platform is enabled to undertake real-value transactions subject to jurisdictional preparedness. That is evidence about this named initiative, not evidence of broad commercial availability or an automatic replacement for a stablecoin route.
An operator should compare the actual settlement asset, participant eligibility, legal framework, FX process, liquidity, operating hours, finality rules and contingency procedures.
mBridge is a multi-CBDC platform developed with the BIS Innovation Hub and partner central banks. BIS says it reached MVP stage in 2024 and was handed to the partners in October 2024.
The initiative explores cross-border payment and FX transactions using participating central-bank money. Its effect on a particular payment is conditional on corridor participation, access, legal arrangements, FX liquidity, operating rules and loss allocation. The project should not be described as removing every intermediary, risk or correspondent-banking dependency from every cross-border route.
When Each Is the Right Tool
Choose from the named arrangement and route, not from a universal instrument hierarchy.
A cross-border design may combine bank-issued arrangements, stablecoins and central-bank arrangements, or rely on one of them. The appropriate design depends on the parties, currencies, legal claims, access rules, liquidity, compliance obligations and settlement process that can actually be evidenced.
| Use case | Possible arrangements to evaluate | Questions that decide |
|---|---|---|
Intra-bank treasury or internal liquidity | Named bank-issued arrangement | Eligible accounts, transfer rules, legal claim, availability and contingency process |
Cross-border B2B between eligible institutions | Named stablecoin route, bank-issued arrangement and/or permitted wholesale CBDC corridor | Participant eligibility, currency, issuer or central-bank terms, FX, liquidity, compliance and settlement finality |
Wholesale FX between central-bank or institutional participants | Permitted wholesale settlement arrangement | Corridor admission, currency pair, legal arrangements, liquidity and operating status |
Household or business use of a foreign-currency token | Named stablecoin and local conversion route | Lawful access, issuer terms, wallet/intermediary requirements, redemption, liquidity and consumer protections |
Domestic retail payments | Named bank, stablecoin or retail-CBDC arrangement | Merchant acceptance, user eligibility, fees, protections, uptime and local legal treatment |
A design can assign different roles to bank-issued, stablecoin and central-bank arrangements, but no universal stack follows from their labels.
For each leg, record: the legal claim; eligible sender and receiver; issuer or central bank; token or account form; funding and redemption path; FX and liquidity providers; compliance controls; finality rule; and the procedure if a party, wallet, intermediary or network fails.
This prevents a false choice between “stablecoins beat tokenized deposits” and “CBDC kills stablecoins”. Different named arrangements can overlap, complement or fail to fit the same route.
Related reading: Six Pathways maps a route-analysis framework.
Counter-Arguments & Limitations
Where this analysis can be challenged, and the counter-counter.
The argument: a permitted wholesale CBDC corridor may use central-bank money between eligible participants and could become an alternative to part of an institutional settlement route.
Boundary: a project’s MVP, pilot or announced scope is not proof that it will admit a given institution, currency or country, or that it will replace another route. BIS describes mBridge as MVP-stage and enabled for real-value transactions subject to jurisdictional preparedness.
What to test: compare corridor coverage, admission criteria, legal arrangements, FX process, liquidity, operating rules, finality and recovery procedures. The outcome can differ corridor by corridor.
The argument: a bank-issued arrangement may add conditional transfer or operating-hour features that reduce the need for a different instrument on a particular route.
Boundary: product features do not determine access, legal claim, customer eligibility, wallet control, redemption path or cross-border availability. Neither permissioned access nor public-chain deployment is a complete answer on its own.
What to test: ask whether the named bank service or stablecoin route admits the actual parties, currencies and jurisdictions; then compare its documented protections, liquidity, compliance process, costs and failure handling. The answer can differ by bank, issuer and corridor.
About This Explainer
Scope, disclosure, and method.
Published by Plexo Institute. This explainer uses sources available through 2026-05-11; operating status, terms and legal treatment may have changed since then.
Disclosure: Plexo develops clearing-network architecture. This explainer is a comparison framework, not a recommendation that every route use all three arrangements. Any implementation requires current legal, operational, liquidity and counterparty diligence for the named product and corridor.
The comparison draws on BIS work on tokenised money and CBDC projects, FSB stablecoin recommendations, MiCA and GENIUS Act materials, and issuer or bank disclosures for named services. Those sources describe specific arrangements at stated dates. This piece does not predict a winner or prescribe a universal architecture; it sets out the questions needed to compare a named arrangement and route.
Continue Reading
The full settlement architecture stack - Six Pathways
Why stablecoins are not bank deposits - What Is a Stablecoin?
The CBDC question for monetary sovereignty - CBDC and Sovereignty
References
BIS Innovation Hub, Project Agora (2024).
BIS Innovation Hub, Project mBridge reached minimum viable product stage (2024).
J.P. Morgan, Kinexys 2026 Milestones.
BIS CPMI, Tokenisation in the Context of Money and Other Assets (2024).
Atlantic Council, CBDC Tracker.
FSB, High-level Recommendations for Stablecoin Arrangements (2023).
Citi, Citi Token Services Marks New Milestone (2024).
European Commission, Markets in Crypto-Assets Regulation (MiCA).
US Congress, GENIUS Act, Public Law No. 119-27.
References
9 references- Project Agora — BIS Innovation Hub
- Project mBridge — BIS Innovation Hub
- Kinexys 2026 Milestones — J.P. Morgan
- Tokenisation in the Context of Money and Other Assets — BIS
- CBDC Tracker — Atlantic Council
- High-level Recommendations for Stablecoin Arrangements — Financial Stability Board
- Citi Token Services Marks New Milestone — Citi
- Crypto-assets - Markets in Crypto-Assets Regulation — European Commission
- S.1582 - GENIUS Act — US Congress