Banks to settle tokenized deposits on-chain 24/7. The Clearing House will build a 24/7 system to settle tokenized bank deposits on-chain and link on-chain activity to RTP and CHIPS while keeping balances as bank liabilities. The Clearing House, owned by 25 large U.S. banks, announced on June 5 that it is developing a system to clear and settle tokenized commercial bank deposits on-chain around the clock. The system will connect blockchain-based activity to established fiat rails, including RTP and CHIPS, and keep those deposits on banks' balance sheets rather than converting them into stablecoins. The proposed network is described as supporting richer transaction data, automated workflows and programmable settlement. It would provide a controlled connectivity layer between on-chain transactions and existing payment infrastructure, allowing tokenized deposits to move between banks while preserving regulatory controls tied to bank deposit accounts. The Clearing House cited its existing DDA Token Service as a precedent. That service replaces customer account numbers with tokens and retains the ability to translate tokens back to account numbers for processing and compliance. Regulatory changes shaped the design. The GENIUS Act sets a framework for payment stablecoins, requires one-to-one reserves for permitted issuers and bars issuer-paid interest solely for holding a payment stablecoin. The act excludes deposits recorded using distributed-ledger technology from the payment stablecoin definition. The FDIC's April proposal said deposit insurance treatment does not depend on whether an insured depository institution records deposit liabilities using distributed-ledger technology, and it said deposits held as reserves backing a payment stablecoin would not be pass-through insured to stablecoin holders. The Office of the Comptroller of the Currency has proposed rules to implement the GENIUS Act for permitted and foreign payment stablecoin issuers. Market data in early June showed the stablecoin sector with roughly $296 billion in market capitalization, with two major tokens accounting for most of that figure. Research from Citi projected substantial stablecoin issuance by 2030, with a base-case forecast of $1.9 trillion and a bull-case forecast of $4.0 trillion. Citi's analysis also projected that bank-issued tokenized deposits could coexist with or outpace stablecoins in transaction volumes by 2030, citing issues such as pre-funding and fragmentation that affect institutional settlement using current stablecoins. Industry groups and regulators have flagged risks tied to stablecoin yields and incentives. Banking trade associations warned lawmakers that yield-like incentives associated with stablecoins could reduce deposit balances held in banks. The Council of Economic Advisers produced modeled estimates of potential lending impacts ranging from about $2.1 billion in a baseline scenario to as much as $531 billion under a stacked worst-case scenario. The Federal Reserve noted that stablecoins' effects on bank funding depend on where demand comes from, how issuers invest reserves and whether issuers gain access to central-bank accounts. The Clearing House's announcement left several operational questions open. The organization did not provide a launch date, specify the ledger design, publish detailed operating rules or define the extent of interoperability with public blockchains. The Clearing House described the service as enabling dollar-denominated token settlement while preserving the legal status, balance-sheet treatment and compliance controls associated with regulated bank deposits. Content on BlockPort is provided for informational purposes only and does not constitute financial guidance. Blockport Company strive to ensure the accuracy and relevance of the information Blockport Company share, but Blockport Company do not guarantee that all content is complete, error-free, or up to date. BlockPort disclaims any liability for losses, mistakes, or actions taken based on the material found on this site. Always conduct your own research before making financial decisions and consider consulting with a licensed advisor. For further details, please review its Terms of Use, Privacy Policy, and Disclaimer.

The Clearing House, a US payments company owned by 25 major financial institutions, has launched an initiative to enable clearing and settlement of tokenised commercial bank deposits at scale. The solution will connect blockchain-based activity with traditional payment rails including the RTP and CHIPS networks. The initiative will support on-chain clearing and settlement of tokenised deposits between banks with 24/7 settlement capabilities, whilst maintaining existing regulatory and operational frameworks. Participating institutions include Bank of America, Citi, JPMorgan, Wells Fargo, HSBC, BNY and PNC Bank. The infrastructure will be accessible to US financial institutions of all sizes and will support use cases including programmable treasury operations, real-time liquidity management, cross-border payments and digital asset settlement. The Clearing House currently processes over $2 trillion daily in payments.

Eye on faster payments: Payfinia's RTP integration; Aeropay's Jack Henry tie-in. Work on growing the real-time payments ecosystem goes on with Payfinia completing an integration with The Clearing House Payments Co LLC's RTP network and Aeropay making an integration with Jack Henry & Associates Inc. to boost its pay-by-bank service. Portland, Ore.-based Payfinia says its work with TCH, which launched the RTP faster payments network in 2017, means it is now able to connect to the RTP network on behalf of financial institutions through its Instant Payment Xchange platform. That service enables consumers to make account-to-account payments using a real-time payments network. Payfinia says the platform now has access to RTP and FedNow, the real-time payments service the Federal Reserve launched in 2023. Already, several credit unions are live on RTP via the Instant Payment Xchange platform, Payfinia says. "By expanding our embedded payment services to the RTP network and unifying native fraud controls across both rails, we eliminate the onboarding complexity and expense that has historically slowed FI adoption," Keith Riddle, Payfinia chief executive, says in a statement. Payfinia also says it is preparing to release its Payments Control Module, a tool meant to enable multiple disbursement options for community financial institutions. Banks and credit unions using it will be able to route outbound payments on either network based on configurable rules. In related news, Chicago-based Aeropay completed an integration with processor Jack Henry that enables request for payment and real-time payments capabilities. Request for payment enables billers, for example, to request payment that can be completed in real-time. Aeropay says the integration allows it to dynamically route transactions according to multiple variables, such as performance, availability, and risk parameters.