Moody's Forecasts US Banks See Tokenized Finance Reaching Tipping Point

Moody’s Ratings reports that most major U.S. banks and financial market intermediaries view the shift to a tokenized financial system as inevitable. The agency says adoption will follow a “slow, then fast” trajectory, with tokenized deposits seen as a logical extension of current models, while stablecoins are viewed as a potential competitive threat.

Current tokenization activity remains limited, primarily to cryptocurrency trading, cross‑border retail payments and tokenized money‑market funds, with the tokenized real‑world asset market valued at about $31.6 billion. Banks are creating dedicated digital‑asset teams and running pilots to prepare for a future surge in demand.

Moody’s outlines three possible outcomes: a “steady growth” base case where tokenization expands modestly in select assets; a low‑growth scenario constrained by regulatory and demand challenges; and a rapid‑growth disruptive scenario that could pressure payment processors, correspondent banks and mid‑sized banks’ deposit balances. The agency emphasizes that broader adoption depends on regulatory clarity, technological maturity and investor confidence.