Digital Money / Learning brief
Tokenized deposits and the unit of account
Your notes
In simple terms / 01
What this means in plain language
Introduces tokenized deposits, commercial bank money represented on a programmable ledger, and uses the idea of singleness of money to explain why keeping every form of money exchangeable at par is the quiet goal behind tokenized settlement.
A tokenized deposit is ordinary commercial bank money, the balance in a customer's account, represented as a token on a programmable ledger. It is still a claim on the issuing bank and still meant to trade at par with every other form of the currency; what changes is the rail, so the money can move quickly, around the clock, and settle against other tokenized assets under conditions. Because a tokenized deposit stays inside the banking system, it inherits the supports that keep commercial bank money at par: capital, supervision, deposit protection, and interbank settlement in central bank money. That is the main difference from a stablecoin, where the promise comes from a separate issuer standing on its own reserves. The quiet goal behind the design is singleness of money, keeping a tokenized euro at Bank Alfa equal to a tokenized euro at Northstar Bank and equal to central bank money. Tokenized settlement means discharging an obligation by transferring tokens; atomic settlement means two linked transfers either both complete or both fail, so a delivery and its payment cannot come apart. Placed on a shared or unified ledger, tokenized money and assets could settle against one another directly. These are proposals that vary by design, so treat them as illustrative and forward-looking.
Key takeaways / 03
Three things to remember
- 01
A tokenized deposit is commercial bank money on a programmable ledger, still a claim on the issuing bank.
- 02
Staying inside the banking system means it keeps the supports that hold commercial bank money at par, unlike a stablecoin from a separate issuer.
- 03
Atomic settlement lets a cash leg and a delivery leg move as one indivisible step, removing mid-trade exposure, with singleness of money as the goal.
Practical use cases / 04
Where you would use this
A bank explores issuing tokenized deposits so corporate clients can settle tokenized-asset trades without leaving the banking system.
A settlement team designs an atomic delivery-versus-payment step so a securities leg and a cash leg cannot come apart.
A product team explains to clients why a tokenized deposit keeps its deposit protections while a stablecoin's safeguards depend on the issuer.
Worked example / 05
Put the idea into a real situation
Illustrative example (SYNTHETIC / TRAINING ONLY): on a shared ledger, Demo Trading holds tokenized euros issued by Bank Alfa and buys a tokenized asset from a seller banking with Northstar Bank for EUR 1,000,000. The ledger swaps the asset token and the deposit token in one atomic step: either Demo Trading gets the asset and the seller gets the euros, or nothing moves, so neither side is ever exposed to the other's failure mid-trade. Throughout, the tokenized euros remain commercial bank money, a claim on Bank Alfa, and stay at par with every other euro. Unified-ledger designs vary and this construction was not verified against a primary source this pass.
Evidence & review / 07
Evidence & review
Conceptual introduction to tokenized deposits and unified-ledger ideas; not a description of any live platform.
What this brief simplifies: SYNTHETIC / illustrative and forward-looking. Tokenized-deposit and unified-ledger designs are proposals that differ by jurisdiction and provider; the ledger, tokens, and atomic-settlement steps shown are a teaching construction and were not verified against a primary source this pass.
Sources for this brief3
- Market practiceMarch 2003 edition
A glossary of terms used in payments and settlement systems ↗ — CPSS (now CPMI), Bank for International Settlements · Commercial bank money; singleness of money
Terminology has evolved since this edition; newer CPMI publications refine some definitions.
- Official requirement
Principles for financial market infrastructures ↗ — CPMI and IOSCO (Bank for International Settlements) · Settlement asset; delivery-versus-payment and finality
Published by the CPSS (now CPMI) and IOSCO; contains 24 principles plus responsibilities for authorities. This site uses it only for high-level concepts such as settlement finality.
- Simplified educational illustration
Payments Signal editorial teaching models — Payments Signal · Illustrative tokenized-deposit ledger and atomic settlement
Used wherever diagrams, scenarios, figures, or example values are didactic constructions rather than sourced facts; every such use carries a simplifications disclosure. All people, companies, banks, and list entries in examples are fictional.