Tokenized deposits could make bank funding less stable and raise credit costs for US households and businesses, according to a new analysis by two economists at the Federal Reserve Bank of Dallas — with agentic AI named as an accelerant.
Economists Rosie Levy and Srini Ramaswamy argued that instant settlement lets depositors chasing higher yields switch banks in seconds. Programmable deposit tokens, combined with agentic artificial intelligence capable of automating the transfers, would shorten the time deposits stay at any single bank and make them more sensitive to interest-rate moves.
The Numbers
The analysis, published Aug. 25, sketches two scenarios. If deposits became 10% more sensitive to interest rates, banks' capacity to hold long-term loans and other assets could fall by roughly $700 billion. If average deposit tenure shortened by 10%, that capacity could drop by about $580 billion. Both figures are expressed in 10-year equivalents and represent capacity erosion, not dollar-for-dollar reductions in lending.
The authors are careful to frame the calculations as scenarios rather than forecasts. But the direction of travel is clear: banks facing more volatile funding would respond by holding larger portfolios of liquid assets — reserves and Treasurys — or by leaning more heavily on term debt, which is more expensive than deposits and would push credit costs up for consumers and businesses.
The paper cites Brazil's Pix instant-payment system as a real-world comparison: a 2025 study found that heavier Pix use increased Brazilian banks' liquid asset holdings and reduced credit intermediation.
Collision Course With BankChain
The warning lands the same week the banking industry doubled down on exactly this technology. On Tuesday, 39 US state banking associations formed the BankChain Alliance to build a nationwide network for tokenized deposits, stablecoins, and automated settlement by 2027. The Clearing House is developing a parallel network backed by JPMorgan Chase, Bank of America, Citi, BNY, and Wells Fargo.
Interconnection is already live: on Aug. 20, Standard Chartered and HSBC completed a cross-border transaction through Swift's blockchain ledger, linking their separate tokenized-deposit systems and recording obligations before settlement over existing rails.
The Dallas Fed analysis highlights the unresolved question at the center of the tokenization push: programmable, always-on money may be efficient for payments, but it fundamentally changes the stability of the deposit base that funds the US banking system — and the FDIC is still weighing guidance on deposit insurance for tokenized instruments.