Tokenized Deposits in Payments: Stablecoins vs Single-Bank vs Network Models

A quick explainer on how stablecoins, single-bank tokenized deposits, and network-based tokenized deposits differ, and why that matters for cross-border payments.

Not all token-based settlement models solve the same problem. For banks and payment providers, the most useful comparison today is stablecoins versus single-bank tokenized deposits versus network-based tokenized deposits. They are built differently, operate under different structures, and matter in different ways for cross-border payments.

Stablecoins are reserve-backed digital tokens typically issued by private companies and designed to maintain a stable value against a fiat currency. They often operate on public blockchain networks and can move peer-to-peer without a regulated financial institution in the flow, which is precisely what makes them useful in some contexts, and complex in others.

Tokenized deposits are bank funds that have been tokenized, for example cash or government bonds, and remain firmly within the banking system. For institutions that want the benefits of blockchain technology – speed, programmability, continuous availability, and traceability – without stepping outside existing regulatory frameworks, tokenized bank-deposits offer a natural path forward. Current AML, KYC, and regulatory oversight routines can remain rather than having to be rebuilt ground-up for a new financial instrument as Stablecoins.

That distinction between stablecoins and tokenized deposits matters in cross-border payments. Stablecoins can play a role in peer-to-peer flows and where off-ramping is not necessary. But for institutions operating within regulated frameworks, tokenized deposits allow them to modernize cross-border infrastructure without compromising compliance. Another concern might be credit-risk, where Stablecoins and tokenized deposits differ considerably. That is also why hybrid structures are becoming more relevant: different rails for different jobs, rather than forcing one model to do everything.

Single-bank tokenized deposits vs network-based tokenized deposits

Single-bank tokenized deposits are issued and used within one bank’s own ecosystem and its clients. The main use case is their programmability within this closed environment, where they can improve efficiency, but they remain tied to one issuer, one balance sheet, and one proprietary infrastructure. It is a closed loop.

Network-based tokenized deposits are different. They are built to work across multiple institutions on a shared, permissioned infrastructure rather than being confined to a single bank’s environment. In this sense you can also say that network-based tokens are bank-agnostic, because all the members of the network can use the network's tokens. In addition to programmability these tokens also eliminate counterparty risk.

That is the more important distinction for cross-border infrastructure. If the goal is direct settlement between regulated institutions across markets, a network model has a stronger strategic logic than a single-bank model. With a network based tokenized deposit model you are not confined to a single bank's ecosystem but all members of the network do peer-to-peer settlement depending on their needs, such as establishing new payment corridors between different geographies. Other benefits might be if the network has centralized pre-funding, meaning that all members can place collateral at a central custodian bank instead of scattering it across markets and partner banks. The bigger the network, the more opportunities for its members.

As cross-border payment infrastructure evolves, banks will need a clearer view of which model fits which use case. Stablecoins, single-bank tokenized deposits, and network-based tokenized deposits each address different needs.

Centiglobe focuses on the network-based tokenized model: enabling regulated financial institutions to move value directly across borders using tokenized deposits based on centralized prefunding and shared infrastructure. We think this model brings benefits for institutions looking to reduce intermediary dependence and rethink cross-border settlement without being dependent on a single bank's ecosystem. You get all the market opportunities of a strong member-based network, in a regulated environment, no scattered prefunding and edge of blockchain technology at the same time.