DBS announced that it has transacted using tokenized deposits with Citi over the weekend.
Both are in the group of banking institutions directly working with Swift’s tokenized deposit platform to modernize cross-border and interbank payments from different parts of the globe.
This is intended for corporate clients based in busy financial hubs such as Singapore and U.S. to deal with out of banking hours and better FX management.
A few months ago, Swift launched its platform as tokenized deposits grow in international testing pilots.
Citi also tested a similar transfer with HSBC at the end of August and is part of 21 banks planning to launch a stablecoin in 2027.
Tokenized Deposits as a Middle Layer
For the longest time, the debate in the industry revolved around who owns the money.
Native crypto projects and their tokens were making the case that the category of fiat currencies as a whole may cease to influence current markets as much as they do.
At the same time, large financial institutions, central banks, and leaders of sovereign states tried to build up momentum for Central Bank Digital Currencies (CBDCs).
In 2026, stablecoins have taken on the role of the former.
Stablecoins simply digitized strong traditional currencies, like the U.S. Dollar and the Euro, on new technology rails and networks for faster and smarter money transfers.
On the other side, CBDCs in some regions have grown out of favor in the last few years, or at least, are now being experimented for processing wholesale payments and settlements.
Tokenized deposits may act as the middle layer between these two versions of money.
Commercial bank deposits can continue to have its say in everyday banking and savings for consumers and businesses, while improving the underlying technology.
Unlike the free routing of stablecoins, tokenized deposits are designed for sending and receiving between bank participants and licensed financial intermediaries only.
Stablecoins and tokenized deposits may also be working hand in hand for separate use-cases, from sending international remittances to accepting treasury transfers, and more.
Therefore, interoperability between the two systems is key.
