Bank of England policymaker Megan Greene predicts tokenised deposits will overtake stablecoins within five years. Yet the more important question is what kind of digital money ecosystem emerges. In the end, they may serve different purposes. Tokenised deposits upgrade the existing banking system. Stablecoins have expanded access to stable currency savings, self-custody and public blockchain infrastructure for users beyond the reliable reach of traditional banking — helping create a pathway to broader digital asset adoption, particularly of Bitcoin.
In late May 2026, Bank of England policymaker Megan Greene invoked the analogy of a race between “the tortoise, the hare and the rhino” to describe the contest she believes will ultimately define the future of digital money.
Speaking on stablecoins and monetary policy at the 32nd Dubrovnik Economic Conference, her prediction was clear. Despite their surging growth over the past decade, stablecoins popularity could fade significantly over the next five years. In their place, banks will pursue what may become one of the most transformative upgrades to global financial infrastructure in decades: tokenised deposits.
Designed to replicate the speed, programmability and settlement efficiency of stablecoins, tokenised deposits would keep digital money inside the regulated global banking system — which makes them especially attractive to banks and regulators.
Even if banks successfully replicate these attributes, however, the debate goes far beyond technology. At its core lies the question of whether the next generation of digital money merely upgrades existing financial institutions, or whether it can also preserve the open and less-permissioned infrastructure enabled by the digital asset ecosystem.
What are Tokenised Deposits?
According to Greene’s analogy, CBDCs are the tortoise, stablecoins are the hare and tokenised deposits are the rhino — the contender she believes will ultimately win the race.
Tokenised deposits are ordinary commercial bank deposits represented on blockchain-style infrastructure. Like stablecoins, they could eventually allow bank money to move across digital rails with greater speed, programmability and efficiency than today’s legacy payment and settlement options. Unlike stablecoins, however, they would stay firmly embedded within the global banking system, with deposits remaining on bank balance sheets and banks continuing to fund lending activity within the existing regulatory perimeter.
That distinction is particularly relevant to banks. While stablecoins may have demonstrated the benefits of blockchain-based transactions, they have also created a new form of competition for the banking industry. Funds that might otherwise sit in traditional deposit accounts can now move into reserve-backed instruments issued by private firms, potentially reducing deposit funding and some of the revenues built around it.
Tokenised deposits offer banks a way to meet that challenge on their own terms, adopting many of the technological improvements pioneered by stablecoins without fundamentally changing the institutions at the centre of the financial system. They also preserve a familiar customer proposition given that, unlike stablecoins, bank deposits can legally pay interest, support lending relationships and sit inside a broader suite of regulated financial services.
Two Competing Visions for the Future of Digital Money
One vision for the future of digital money seeks to bring the benefits of blockchain technology into existing financial structures through tokenised bank deposits, CBDCs and regulated financial infrastructure. The other is built around public blockchain networks, privately issued stablecoins and open digital asset ecosystems.
In practice, these approaches are not mutually exclusive. Stablecoins, tokenised deposits and CBDCs may all coexist in the future. Yet they embody fundamentally different assumptions about how money should move, who should issue it and how much freedom users should have to interact with it.
The regulatory frameworks now taking shape reflect these different philosophies. In the United States, the GENIUS Act, signed into law in July 2025, created a federal framework for regulated private-sector stablecoins, while policy momentum has moved sharply against any future adoption of retail CBDCs. The underlying assumption is that privately issued digital dollars can strengthen the dollar’s global reach while allowing innovation to occur through the market rather than the state.
The European Union has taken a more institution-led approach. Alongside the development of the digital euro, the EU’s Markets in Crypto-Assets (MiCA) regulation imposes strict licensing, capital and reserve requirements on stablecoin issuers, reflecting a preference for integrating digital money into existing regulatory structures. The risk is that this approach protects stability at the cost of reducing the competitive pressure and open experimentation that made stablecoins such a powerful catalyst. The UK sits somewhere between the two, exploring tokenised securities and wholesale settlement infrastructure while proposing a cautious framework for systemic stablecoins.
Taken together, these frameworks suggest that digital money is unlikely to develop along a single path. The US approach leaves greater room for privately issued digital assets on public networks, while Europe and the UK are moving more cautiously around institution-led digital money and regulated infrastructure.
Why Stablecoins Matter Beyond Payments
The challenge for Greene’s thesis is that stablecoins may have succeeded for reasons that extend well beyond speed and settlement efficiency.
While stablecoins can move value globally, settle around the clock and operate across public blockchain networks, their significance is far more than technical. For many users, particularly in emerging markets, stablecoins provide access to something that local financial systems often cannot: a relatively stable store of value and a gateway to the global economy.
In Nigeria, for example, the naira lost more than 60 percent of its value in eight months following a 2023 currency float. According to Chainalysis, the country received $92 billion in on-chain crypto value in the twelve months to June 2025, accounting for roughly 60 percent of stablecoin inflows into Sub-Saharan Africa. In Argentina, years of high inflation, capital controls and currency weakness have made dollar-linked stablecoins an important savings and exchange tool, with industry data showing they account for a majority of local crypto activity.
In this context, the appeal of stablecoins is not incremental convenience but access, together with portability, self-custody and exposure to a more stable currency where local banking systems or monetary policy have repeatedly fallen short. Tokenised deposits are unlikely to serve the same need, given their primary focus is on the ‘already-banked’ and that they operate within many of the same constraints that make traditional dollar-denominated accounts inaccessible in the first place.
Stablecoins are not without trade-offs. Their resilience depends on issuer governance, reserve quality, redemption access, blockchain reliability and regulatory treatment. Public-chain stablecoins can also be frozen at the contract level or affected by sanctions compliance. These risks do not negate their utility, but they suggest stablecoins and tokenised deposits are more likely to compete across different use cases than to replace one another completely.
There is also the question of openness. Stablecoins operate on public blockchain networks, allowing wallets, applications and financial services to be built without requiring permission from banks or payment providers. Tokenised deposits may improve settlement inside the banking system, but they are unlikely to offer the same open surface area for developers, users and financial services outside traditional intermediaries.
Ownership, Access, Financial Freedom
Tokenised deposits and stablecoins may ultimately deliver many of the same technological advantages. The deeper distinction lies in the ecosystems they reinforce. One extends the existing banking system onto blockchain rails. The other expands an open digital asset ecosystem built around public networks, self-custody and direct forms of financial ownership.
The choice is unlikely to be binary. Tokenised deposits may become an important part of the future financial system, while stablecoins continue to serve distinct roles across open blockchain networks, digital asset markets, cross-border payments and regions where access to stable currencies remains limited.
Those roles matter not only for payments, but for how users enter the wider digital asset ecosystem.
For many users, stablecoins are a first step into wallets, public blockchain networks and asset ownership beyond traditional intermediaries.
As such, they help expand participation in a broader digital asset ecosystem — one in which Bitcoin, above all, represents the furthest expression of self-custody, monetary sovereignty and ownership without reliance on banks, issuers or governments.
Be the first to comment