Dallas Fed Researchers Say Tokenized Deposits Could Weaken Bank Liquidity

Dallas Fed researchers said tokenized deposits and 24/7 instant blockchain transfers could weaken bank liquidity and limit banks’ ability to make long-term loans. According to ChainCatcher, the study was written by Rosie Levy and Srini Ramaswamy. The research said about 80% of the U.S. banking system’s $7 trillion in maturity risk is supported by the maturity profile of traditional deposits. It added that if the weighted average maturity of deposits shortened by 10%, banks’ maturity transformation capacity would fall by about $580 billion, potentially increasing liquidity risk and funding outflow pressure. Kula co-founder Chris Turner said the speed of token transfers does not equal legal settlement of the underlying financial claim. He said tokens can move across blockchain networks within seconds, but payment, ownership, and legal claims still depend on banks, custodians, clearing systems, and regulatory registries to complete settlement.