U.S. banks are seeking to reclaim a central role in the digital dollar market. By launching interest-bearing tokenized deposits protected by federal insurance, SoFi and other institutions are offering an alternative to stablecoins such as USDC. These products combine some of the advantages of blockchains with traditional banking services, but their circulation remains more restricted than that of freely transferable tokens.
SoFi bets on an interest-bearing tokenized bank deposit
On October 22, SoFi announced the launch of SoFi Earn, also designated by the symbol SOFIE. The bank presents this product as a tokenized bank deposit for individuals, the first of its kind offered by a U.S. national bank. It works by digitally representing funds deposited with SoFi Bank.
Each SOFIE unit corresponds to one dollar held in a bank account. The product offers an announced variable annual yield of 4.40%. Deposits are also covered by the Federal Deposit Insurance Corporation (FDIC), up to $250,000 and subject to applicable terms and limits.
SOFIE is expected to roll out gradually through November. Holders will be able to convert their tokens at par into SoFiUSD, the bank’s stablecoin, to make blockchain transfers. This conversion distinguishes the tokenized deposit from a conventional stablecoin: the two assets do not necessarily offer the same transfer capabilities or the same protections.
Why banks are tokenizing their deposits
Tokenization consists of representing an asset or claim as a digital token recorded on a blockchain. In the case of a tokenized deposit, the token represents funds recorded on the bank’s books. The aim is to enable certain digital operations—such as transfers or settlements—while keeping the deposit within the traditional banking framework.
For institutions, this approach can bring together two features sought by businesses and users: the speed of blockchain transactions and an existing banking relationship. Programmable payments and transfers that may be available around the clock could be of particular interest to companies that need to move liquidity outside regular banking hours.
Blockchain, however, is not limited to these financial uses. Discussions about its evolution also concern its infrastructure, applications, and security models. In this regard, Vitalik Buterin discusses Ethereum’s evolution beyond its original role as a blockchain, while the risks associated with digital innovation remain a focus of attention in the crypto ecosystem.
A strategy already adopted by several major institutions
JPMorgan, Citi, and Wells Fargo are developing their own solutions
SoFi is not the only U.S. bank exploring deposit tokenization. In November 2025, JPMorgan launched JPM Coin (JPMD), a token representing dollar deposits and aimed at institutional clients. The product can be used on Base, a blockchain built around the Ethereum ecosystem.
Citi is also working on tokenized deposit services for businesses. Wells Fargo, for its part, announced in August 2026 a solution that allows its business clients to transfer funds and settle transactions at any time. These initiatives show that several banks are assessing how blockchain infrastructure can complement their payment networks.
Their offerings are not all aimed at the same audience. Some initially target large companies and financial institutions, for which treasury management and transaction settlement are significant operational concerns. SoFi’s product stands out for being geared toward individuals and for the announced yield on tokenized deposits.
Keeping liquidity within the banking ecosystem
By offering their own digital assets, banks are seeking, in particular, to prevent their customers’ funds from migrating to stablecoin issuers or crypto platforms. A tokenized deposit maintains a direct link to the banking institution: the bank retains its relationship with the customer and can integrate the product into its existing services.
This development is part of a broader competition to capture digital liquidity. Blockchain networks, stablecoins, and tokenized banking solutions are vying for uses related to payments, transfers, and settlements. An analysis by Foresight Ventures describes the competition among specialized blockchains to attract a substantial liquidity market.
Infrastructure choices will also shape this competition. Issuers and institutions may favor different networks depending on costs, speed, tool availability, or security features. BNB Chain thus holds a notable position within the crypto ecosystem, alongside other networks used for digital asset applications and trading.
A regulatory framework distinct from that of stablecoins
Interest payments, a potential advantage of tokenized deposits
The U.S. regulatory environment helps distinguish the two models. The GENIUS Act prohibits stablecoin issuers from paying interest directly to token holders. This restriction does not apply in the same way to tokenized bank deposits, which fall under a different legal framework when they represent funds held at a bank.
Institutions can therefore promote interest-bearing products such as SOFIE while relying on their banking status and the rules applicable to deposits. FDIC coverage is a distinctive feature for eligible customers, but it should not be equated with a blanket guarantee covering all digital assets. It depends on the status and custody of the funds, as well as regulatory limits.
Stablecoins, by contrast, generally rely on a promise of stable value relative to a currency such as the dollar, with reserves held according to each issuer’s model. Crypto platforms may, under certain conditions, offer rewards to their customers, but these are not necessarily equivalent to bank interest or backed by the same protections.
Limits compared with USDC and stablecoins circulating on public blockchains
SOFIE’s circulation remains restricted
Despite its yield and banking status, SOFIE does not operate like a freely transferable stablecoin on a public blockchain. To send funds to an external wallet, users must first convert their tokens into SoFiUSD. This step may change the characteristics of the asset held: the bank’s stablecoin does not automatically earn the yield associated with the tokenized deposit or carry the same FDIC protection.
This difference matters to people who want to use a digital asset across multiple applications. Stablecoins such as USDC can be integrated into exchanges, decentralized finance protocols, or compatible payment tools. Banks’ tokenized deposits, on the other hand, are still often designed for environments and workflows determined by their issuer.
An asset’s ability to move from one network to another also depends on transfer infrastructure and its security. Incidents involving bridge protocols are a reminder that moving between different blockchains can carry operational risks. A recent case is detailed in this article about Allbridge Core pausing its protocol after a hack that resulted in the theft of more than one million dollars.
A rivalry shaped by use cases
Tokenized deposits and stablecoins address overlapping but not identical needs. A customer may prefer a bank deposit to maintain a relationship with a regulated institution and earn a yield. A business or decentralized finance user may instead seek a stablecoin that is easy to transfer and supported by a wide range of services.
For banks, the challenge is to make their tokenized assets practical enough to compete with solutions already adopted in the crypto world. This means clarifying conversion terms, any fees, compatible networks, and the protections attached to each step. Identity management, access control, and automated tools are also among the sector’s security concerns, as discussed in Fidelity Digital Assets’ analysis of the risks associated with using artificial intelligence agents in cryptocurrencies.
The growing prominence of these products marks an evolution in the role of banks in the digital economy. After leaving crypto companies to develop their own digital dollars for a long time, U.S. institutions are now seeking to offer tokenized assets directly linked to their accounts, with banking rules and transfer capabilities inspired by blockchains.
