Deutsche Bank Plots Entry into Stablecoins and Tokenized Deposits

As reported by Bloomberg, Sabih Behzad, Deutsche Bank’s head of digital assets and currencies transformation, stated that the bank is considering various strategies, including issuing its own stablecoin or participating in a collaborative industry initiative. Additionally, the bank is assessing the potential for developing tokenized deposits aimed at improving payment efficiency.

Stablecoins, digital currencies pegged to fiat currencies like the euro or dollar, and tokenized deposits, which are blockchain-based representations of traditional bank deposits, are gaining traction as banks seek faster, more cost-effective payment methods. While these technologies have been under development for years, large-scale use cases remain limited.

Behzad noted that stablecoins are gaining strong momentum, particularly in the U.S., where the regulatory environment is becoming increasingly supportive. He explained that banks have a broad range of strategic options, from serving as reserve managers to issuing their own stablecoins independently or as part of a consortium.

Deutsche Bank’s exploration into stablecoins and tokenized deposits comes amid increasing regulatory clarity in both the European Union and the United States. In the EU, comprehensive frameworks for digital assets are being established, while in the U.S., legislation such as the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act and the STABLE Act are progressing through Congress.

The GENIUS Act, expected to pass in the coming months, aims to provide federal regulation for stablecoins with a market cap exceeding $10 billion, while allowing state regulation if it aligns with federal rules. The STABLE Act focuses on state regulation without conditions. These legislative efforts are anticipated to accelerate the adoption of stablecoins by providing legal certainty for banks and other financial institutions.

Deutsche Bank has been gradually building its digital assets capabilities. Last year, it invested in Partior, a blockchain-based cross-border payments platform. The bank also partnered with Swiss blockchain firm Taurus in 2023 to offer digital asset custody services to institutional clients. Furthermore, Deutsche Bank’s asset management arm, DWS Group, has launched a joint venture with Flow Traders and Galaxy Digital to issue a euro-denominated token.

In addition to these initiatives, Deutsche Bank is participating in Project DAMA 2, a collaboration with Singaporean AI company finaXai. This project aims to combine artificial intelligence with blockchain technology to enhance digital asset management, making financial services more efficient and responsive to today’s industry needs.

The bank’s interest in stablecoins and tokenized deposits reflects a broader shift in the financial industry toward embracing digital assets. Other major banks, such as JPMorgan Chase, have also made significant moves in this space. JPMorgan recently announced that it will accept Bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust (IBIT), as collateral for loans, signaling a growing acceptance of cryptocurrencies in traditional banking.

The stablecoin market has seen substantial growth, with its total market capitalization rising from around $20 billion in 2020 to $246 billion by May 2025. Tether (USDT), the largest stablecoin by market cap, holds approximately $150 billion and is now among the top global holders of U.S. Treasury securities, with more than $120 billion in assets. Stablecoins currently facilitate over two-thirds of cryptocurrency trading, offering around-the-clock access, rapid settlement, and low-cost programmable payments.

Deutsche Bank’s exploration into stablecoins and tokenized deposits is part of its broader strategy to modernize its financial offerings and stay at the forefront of financial technology advancements. As regulatory frameworks continue to evolve, the bank’s initiatives in digital assets are poised to play a significant role in shaping the future of banking and finance.