Tokenized Deposits Could Raise Borrowing Costs, Fed Economists Warn

Dallas Fed Economists Assess Tokenized Deposit Costs

Dallas Fed economists said faster, programmable deposits could make bank funding less stable, potentially pushing lenders toward more expensive funding.

Tokenized deposits could raise borrowing costs, Fed economists warn

Dallas Fed economists estimate tokenized deposits could reduce banks’ duration capacity by $700 billion if depositors become more rate sensitive.

Dallas Fed warns tokenized deposits could strip $700 billion from U.S. banks' lending capacity

Tokenized deposits could raise US credit costs: Dallas Fed economists

Dallas Fed economists said faster, programmable deposits could make bank funding less stable, potentially pushing lenders toward more expensive funding.

Tokenized Deposits Could Drain $700 Billion From Bank Lending, Dallas Fed Warns

A shift toward faster, more rate-sensitive deposits could push banks into safer assets, constrain lending, and raise borrowing costs, Dallas Fed researchers said.