Stablecoins and tokenized deposits
Two ways to put private money on a ledger that settles differently. What backs each, how you redeem it, and what risk you keep are what separate them.
IN ONE LINE
If a CBDC is central-bank money in digital form, the next two instruments are private money in digital form — and the difference matters.
A stablecoin is a digital token whose issuer aims to keep it worth a fixed amount of a currency, say one unit for one euro.
A tokenized deposit is an ordinary bank deposit represented as a token on a ledger, still a claim on the bank that holds it.
Both can move on a shared ledger and settle quickly; both are commercial, not central-bank, money.
The plain question to ask of either is the same one from the first topic: whose promise is this, and what stands behind it? *These are forward-looking, design-dependent instruments.
Descriptions here are illustrative and labelled SYNTHETIC / TRAINING ONLY; concrete designs, backing arrangements, and rules vary by jurisdiction and were not verified against a primary source this pass.*
WHAT IT ACTUALLY IS
The safety of a stablecoin lives in its backing and its redemption.
A fiat-backed stablecoin claims to hold reserve assets — cash and short-term instruments — equal to the tokens in issue, so a holder can redeem one token for one unit of currency on demand.
Whether that promise holds depends on what the reserves actually are, whether they are segregated, and whether redemption works under stress; when it does not, the token can trade below par.
A tokenized deposit starts from a different place: it is a claim on a supervised bank, inside the existing framework of deposit rules, so it inherits that bank's protections and its credit risk.
Read as settlement assets, they differ in who you are exposed to.
Settling in a stablecoin exposes you to its issuer and reserves; settling in a tokenized deposit exposes you to the issuing bank; settling in central-bank money exposes you to neither private party.
The comparison in this topic lays those columns side by side.
HOW IT WORKS
The reason these instruments attract attention is what a shared ledger lets you do at the moment of settlement.
Tokenized settlement means representing the assets and the money on ledgers so that a transfer can be recorded and made final programmatically.
Its headline capability is atomic settlement: two legs of an exchange — say a security against its payment — either both complete or both fail, with no window in which one party has delivered and the other has not.
That removes a specific, real risk from today's sequenced settlement.
A related idea is a unified ledger: a common platform where tokenized central-bank money, tokenized deposits, and other assets could sit together, so atomic exchanges span them without stitching separate systems.
Two cautions belong here.
First, atomicity solves timing risk, not credit or backing risk — a stablecoin that settles atomically is still only as sound as its reserves.
Second, none of these designs is settled practice.
*Every specific above is illustrative and unverified against a primary source this pass; treat singleness-of-money at par as the property these designs must preserve, not one they can assume.*
THE WORDS
- Stablecoin
- A digital token designed to hold a stable value, usually by referencing a fiat currency and holding backing reserves.
- Fiat-backed stablecoin
- A stablecoin that claims to hold reserves in a national currency and safe assets, so each token can be redeemed for one unit of that currency.
- Tokenized deposit
- A commercial bank deposit represented as a transferable token on a programmable platform, remaining a claim on the issuing bank rather than a new kind of money.
- Tokenized settlement
- Settling an obligation by moving a tokenised settlement asset on a programmable platform, so the payment leg can be linked to a matching asset transfer.
- Atomic settlement
- Settlement where two linked transfers either both complete or both fail together, removing the risk that one side pays and the other does not.
- Unified ledger
- A proposed shared platform holding tokenised money and assets together, so linked transfers can settle in one place instead of across separate systems.
READ FIRST
CONNECTED TO
SOURCES
- Principles for financial market infrastructures — CPMI and IOSCO (Bank for International Settlements)
- A glossary of terms used in payments and settlement systems — CPSS (now CPMI), Bank for International Settlements
- Payments Signal editorial teaching models — Payments Signal
Derived from Stablecoins and tokenized deposits. Every claim on this card is sourced on that page.