JPMorgan Takes Deposit Tokens Public

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Introduction

Welcome to the Tokenized newsletter, brought to you by the creators of the Tokenized Podcast Simon Taylor of Fintech Brainfood, Pet Berisha of Sporting Crypto, and Shwetabh Sameer of Molten Ventures.

We are the newsletter for institutions that need help preparing for a Tokenized future.

We run through the headlines every week, what it means for you and a market readout. Always with an institutional, business-focused perspective. 

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Simon’s Market Readout 💬 

JPMorgan just took deposit tokens public, and the implications for institutional money movement onchain are significant.

Here's what actually happened: JPMorgan made JPM Coin available to institutional clients for 24/7 on-chain transactions on Base, Coinbase's public Layer 2. Companies like market maker B2C2, Mastercard, and Coinbase are now executing transactions on a public blockchain. There's a Block Explorer - you could potentially see these transactions if you knew the wallet addresses. This isn't a closed loop anymore.

Now, unlike a stablecoin, the deposit token is backed by bank deposits within JPMorgan, and JPMorgan has been a leader in this space for a while. Kinexys has been enabling instant 24/7 cross-border payments with deposits since 2019. When we had Basak Toprak on the Tokenized podcast a couple of months ago, she told us that Kinexys is already doing more than a trillion dollars in annualized payments volume, in real payments volume that would potentially dwarf what we see in stablecoins. I know there's a lot of trading activity in stablecoins, but even if you take the bigger adjusted figure of $9 trillion happening in stablecoins, JPMorgan would already be a major player. But now what's happening is their public launch and public availability and their focus on Kinexys as a business means this is their long-term payment strategy.

JPMorgan clears trillions of dollars per day. One day of payments in JPMorgan would be bigger than all of the stablecoin industry if they moved it all across. They are a juggernaut. They are truly enormous. So, this move is really special.

The other thing that's special is that their institutional clients can potentially use it. So imagine a new scenario in which I'm a JPMorgan client and I'm upgraded to use Kinexys. What that means is, wherever I have a JPMorgan bank account, anywhere around the world, I can move those deposits, those dollars, instantly, 24/7. That's nice, but there's only so much fun you can have on your own blockchain.

So here's what happens when we start to move the JPM Coin onto Base. What if we could swap the offchain JPM Coin for the onchain USDC? The JPMorgan institutional client has their JPMorgan deposit token. They would hold that in JPMorgan's custody on JPMorgan's blockchain, and it can't leave the JPMorgan walls. But what if they moved that to Base? Now the JPM Coin is on Base, sitting in their wallet. Could they swap that for USDC? Why, yes. I imagine they could. If a market maker like B2C2 is involved, that would be interesting.

Now, if they've swapped it for USDC, could they take that to any other wallet, anywhere else? Could they pay somebody with it? Could that USDC even be swapped for another bank's deposit token? Why, yes, it could.

And what you see is, this is the beginning of how all deposit tokens go onchain, and why deposit tokens are a really big effing deal.

Stories You Can't Miss 📰

🏛️ Bank of England Launches Consultation on Regulating Stablecoins

The Bank of England just released its stablecoin consultation paper, and there's something in here every major issuer desperately wants: direct access to central bank settlement. While Circle's filing for a U.S. bank charter just to reach the Fed's payment systems, the UK is offering RTGS access to "systemic" stablecoin issuers. We're talking up to 10x cheaper settlement costs and a completely different competitive playing field.

Key Points:

• Direct central bank settlement: Systemic stablecoin issuers get RTGS access—no correspondent banks, no intermediary fees, just straight into the UK's core payment infrastructure

• 60/40 reserve split: Hold 40% at the BoE with no yield, invest up to 60% in UK gilts that actually generate revenue - finally, a sustainable business model that regulators designed on purpose

• Emergency liquidity under consideration: The BoE is considering liquidity arrangements for systemic issuers during times of stress, treating them like other systemically important payment infrastructure

• HM Treasury picks the winners: The Treasury decides who's "systemic - not automatic thresholds, actual discretionary judgment calls

• FCA path for smaller players: Non-systemic issuers can hold 95% in gilts under FCA supervision, then graduate to BoE oversight if they hit scale

• Temporary caps that actually make sense: £20,000 for individuals, £10 million for businesses, with carve-outs for exchanges and merchants who need bigger balances. The limits may be removed once banks aren't worried about deposit flight

• Rules expected to be finalized in 2026: Consultation closes February 10, final rules in H2 2026

The Tokenized Take:

Here's the competitive landscape for stablecoin issuers right now. In the US, you want Fed access? File for a bank charter, raise billions in capital, wait years for approval, and submit to full banking supervision. In the EU? MiCA caps dollar stablecoins at €200M daily volume, and major exchanges delisted USDT for non-compliance with reserve requirements. The ECB wants everyone to use the digital euro instead. The UK just said: meet our prudential standards, get Treasury designation, and we'll give you central bank infrastructure without the bank charter.

This isn't theoretical. Wise has direct Bank of England access and they're not a bank. That settlement advantage is why they can move GBP cross-border cheaper than anyone using correspondent banking networks. Now picture Circle UK or a UK bank consortium with the same cost structure for sterling stablecoins. Suddenly offshore dollar stablecoins settling through commercial banks look expensive.

The 60% gilt allocation changes the economics to a good extent. Systemic issuers can actually make money on reserves while the BoE maintains oversight. Non-systemic issuers under the FCA get up to 95% gilt allocation during the transition - even better margins. So the growth path is obvious: launch under FCA with strong revenue generation, scale up, get systemic designation for settlement access, move to BoE supervision with slightly tighter reserves but way lower operational costs.

Here's what matters: the UK has zero systemic stablecoin issuers today. This is infrastructure waiting for someone to use it. First movers who can meet the standards get direct settlement, potential emergency liquidity access, and regulatory clarity while their competitors are still filling out bank charter applications in Delaware.

The Treasury designation process is flexible in ways banking regulation never is. Instead of hitting an asset threshold and automatically triggering supervision, HM Treasury looks at your market position, cross-border volume, and stability implications before deciding you're systemic. There's room for actual conversation about what systemic means.

Think about what this means for USDC or USDT in the UK. You can stay non-systemic under FCA supervision - this is fine for crypto trading, limiting for payments growth - or pursue systemic status, which means building real sterling operations and UK infrastructure. The framework basically says: if you want to be treated as systemically important, you need to actually be systemic in sterling markets.

The timeline puts rules finalized in late 2026, right when we'd expect U.S. bank charters for crypto firms and full MiCA enforcement. That's the moment major issuers pick their primary regulatory home. The jurisdiction offering central bank access without becoming a bank just got a lot more interesting.

This won't create 20 new sterling stablecoins. The standards will be high, the capital requirements real, and the oversight intensive. But for the 2-3 issuers who can actually qualify for systemic designation, the UK just offered something you literally cannot buy in most jurisdictions: settlement infrastructure that requires becoming a bank everywhere else.

🏛️ Japan's Three Megabanks Get Approval for Joint Yen Stablecoin. And They're Not Waiting

Japan's Financial Services Agency just approved a proof-of-concept trial for a yen stablecoin issued jointly by the country's three largest banks: MUFG, Sumitomo Mitsui, and Mizuho under its Payment Innovation Project and FinTech PoC Hub. Nikkei reports the banks expect to roll out by March 2026. This comes weeks after JPYC launched as Japan's first regulated yen stablecoin. Now the institutions controlling over $5-6 trillion in assets are moving to production.

Key Points:

• Three megabank consortium approved: MUFG, Sumitomo Mitsui and Mizuho received FSA greenlight for joint yen stablecoin under the Payment Innovation Project, with banks expecting March 2026 rollout

• Trust-based issuance structure: The three banks act as joint principal trustees with a trust bank as agent trustee, issuing stablecoins as specified trust beneficiary rights under the Payment Services Act

• Multi-issuer compliance testing: The trial verifies whether regulatory compliance works when multiple banks jointly issue a single stablecoin—shared infrastructure, not fragmented competition

• JPYC established the precedent: The fintech launched Japan's first licensed yen stablecoin in October 2025, proving the regulatory framework works

• Domestic reserve custody: Reserves must be held at domestic trust banks in segregated accounts

The Tokenized Take:

Japan's megabanks are moving as a consortium, not competitors. In the US, Circle, Paxos, and regional banks are fighting for individual market share. In Europe, nine banks announced plans for a joint euro stablecoin last month - though as we covered then, navigating MiCA compliance and ECB politics makes their path uncertain. Japan's three largest banks got approval and expect production in five months.

The consortium structure matters. A MUFG-only yen stablecoin competing with Mizuho's yen stablecoin fragments liquidity. A jointly-issued token becomes actual digital infrastructure that all three banks settle through. This is shared liability across Japan's dominant institutions backing the same instrument.

JPYC spent years getting regulatory approval as a first mover. The megabanks are moving from approval to expected production in the next few months. That speed only works because JPYC proved the compliance framework and because these banks can deploy resources when they commit.

Cross-border implications are clear. MUFG, SMBC and Mizuho operate globally with major presences across Asia-Pacific and the US. A yen stablecoin backed by all three becomes settlement infrastructure for trade finance and remittances across their correspondent network, reducing reliance on traditional correspondent banking arrangements for programmable yen settlements.

The timing puts Japan ahead of other major economies. The UK expects to finalize rules in 2026. Europe's nine-bank consortium faces MiCA's reserve requirements and ECB coordination challenges. US banks have clarity through GENIUS Act but still need charter approvals. Japan's banks expect to launch in early 2026.

By March 2026, Japan will have both a crypto-native fintech stablecoin and a megabank consortium stablecoin operating under the same framework. That's when we find out whether banks can compete on blockchain rails, or whether JPYC's head start matters more than $5 trillion in bank balance sheets.

🚀 Coinbase Abandons $2B BVNK Deal While Building Consumer-to-Institution Financial Stack

Two weeks ago, Coinbase announced a partnership with Apollo to deploy stablecoin credit strategies. November 10: they launched a token sale platform with Monad as the first issuer. November 1: they walked from the $2 billion BVNK acquisition after reaching exclusivity and due diligence - same day they launched UK savings accounts offering 3.75% AER. Four strategic moves in fourteen days. Coinbase is assembling full-stack financial infrastructure from retail deposits to institutional credit to primary token issuance.

Key Points:

• BVNK acquisition terminated November 11: After reaching exclusivity in October, both parties mutually agreed not to proceed - deal would have provided immediate access to $20B in annual payment volume through players like Worldpay and Flywire

• Token sale platform launches with Monad November 17: First US retail token sale since 2018 ICO crackdown - 7.5% of supply at $0.025 per token, Coinbase takes percentage of USDC proceeds from issuer side with no retail fees

• Primary market infrastructure complete: LiquiFi acquisition in July for cap table management+ Echo acquisition in October for $375M bringing $200M+ deal flow + new token sales platform = end-to-end primary issuance

• UK savings accounts launch November 11: 3.75% AER with daily interest, powered by ClearBank, FSCS-protected to £85,000, instant access – UK Lead Keith Grose positioning Coinbase’s aim to build the "UK's number 1 financial app"

• Apollo credit partnership announced October 27: Joint development of over-collateralized loans, corporate direct lending to stablecoin issuers/fintechs secured by digital assets, and tokenized credit holdings - products targeting 2026 launch

The Tokenized Take:

Coinbase walked from BVNK's payment infrastructure to build something broader. BVNK processes $20B annually for enterprise payment clients, which is a meaningful volume. But the simultaneous announcements reveal different priorities: control the financial services value chain from fiat onramp to token issuance to institutional credit.

The revenue architecture works differently than traditional models. UK savings customers depositing GBP become potential trading customers the moment they hit the "swap to crypto" button in the same app. Customer acquisition cost for a 3.75% savings account gets recovered on the first £100 Bitcoin purchase. Revolut proved this model in Europe - Coinbase is replicating it with crypto rails native to the platform.

The token sale platform changes Coinbase's position in capital formation. Echo brought $200M+ in deal flow across a good number of projects and Cobie's distribution network. LiquiFi handles cap table management and vesting. Projects can now fundraise, manage equity, launch tokens, and list on secondary markets - all through Coinbase infrastructure. Brian Armstrong tried taking Coinbase public partially onchain in 2021; the SEC blocked it. Four years later, they're launching a widely available US retail token sale for the first time since 2018 with regulatory cooperation.

The Apollo partnership brings institutional capital into stablecoin-native credit. Apollo manages $840 billion as of June 2025 - even small allocations into tokenized credit strategies create substantial flow. Direct lending to stablecoin issuers, payment providers, and neobanks secured by digital assets generates yield without traditional banking infrastructure. Products target 2026 launch, aligning with GENIUS Act implementation.

BVNK made sense as enterprise payment middleware connecting processors to stablecoin rails, as we covered last week. But Coinbase do operate custody, settlement infrastructure, and USDC economics through their Circle partnership. A $2B acquisition for payment processor integrations competes with building consumer-to-institution infrastructure that generates multiple revenue streams per customer. Each UK savings customer represents potential trading volume. Each token sale participant might deploy into Apollo credit products. And if these Apollo credit transactions settle on Base, it will generate network fees.

Mastercard pursuing Zerohash for $1.5-2B targets different distribution. Card networks need white-label infrastructure for member banks - distribution through existing banking relationships. Coinbase wants direct customer relationships across retail, institutional, and issuance segments. Both strategies address stablecoin infrastructure, but neither necessarily requires BVNK specifically.

UK savings accounts launching now positions Coinbase against Revolut and traditional banks in Europe's largest crypto-friendly market. Token sales starting with Monad - a well-funded L1 launching November 24 - tests regulatory frameworks before expanding to additional projects. Apollo partnership products launching in 2026 match GENIUS Act timelines and MiCA stabilization in Europe.

Coinbase generated $355M from stablecoins in Q3 2025, representing ~19% of total revenue versus $844M from volatile trading fees. The directional shift is visible: move from fee-dependent exchange toward an infrastructure platform generating predictable revenue from deposits, token issuance, reserve income, credit deployment and network transaction fees.

By 2026, Coinbase could operate UK savings accounts, US token launchpad, institutional credit desk, and secondary trading markets - all feeding customers and capital between products. This represents financial services infrastructure built on blockchain rails, not an exchange bolting on adjacent businesses.

📰 Some More News:

🏦 Tokenization, Stablecoins & Finance

• SoFi Bank launches spot crypto trading (Read more here)

• Circle explores native token for Arc network as Q3 shows sharp growth (Read more here)

• Circle reports $740M revenue in Q3, beating analyst forecasts (Read more here)

• Franklin Templeton expands tokenized fund platform to Canton Network (Read more here)

• RWA specialist Centrifuge debuts tokenization service, starting with Daylight (Read more here)

• Crypto's yield gap with TradFi narrows as staking, RWAs surge (Read more here)

• Bybit finds 16 blockchains with power to freeze user funds (Read more here)

🤑 Funding and M&A

• Bybit in talks to acquire South Korea's Korbit exchange (Read more here)

• Lighter rises to top perp DEX by volume, reveals $68M raise (Read more here)

• Winklevoss Capital funds new Zcash DAT, buy $50M ZEC (Read more here)

• Strategy adds $50M in Bitcoin holdings to crypto stockpile (Read more here)

• BitMine stock rises after Tom Lee's firm buys the dip, adding $389M in Ethereum (Read more here)

• Biotech firm Propanc lines up $100M to fund crypto treasury and cancer therapy push (Read more here)

• Sora Ventures CEO gains largest stake in AsiaStrategy amid Bitcoin reward strategy (Read more here)

💼 Government & Policy

• Compliant ICOs could define crypto's next bull run amid new Coinbase platform launch (Read more here)

• CFTC set to approve leveraged crypto trading in the U.S. next month (Read more here)

• US Treasury and IRS issue guidance to make staking easier for ETFs (Read more here)

• Pooled order books in the crosshairs as EU regulators look to tighten MiCA oversight (Read more here)

• Kraken co-CEO warns UK rules meant to protect users punish them: FT (Read more here)

• UAE's 'digital dirham' CBDC pilot completes first transaction (Read more here)

• Canary Capital filing signals spot XRP ETF set for launch this week (Read more here)

• Bitwise's spot Chainlink ETF appears on DTCC registry, signaling possible launch (Read more here)

• Crypto lawyer John Deaton announces new US Senate bid (Read more here)

• Greenidge stock jumps 30% after New York settles air-permit battle over crypto mining operation (Read more here)

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