Banks should embrace tokenized deposits as a way to compete in the evolving financial landscape, leveraging the benefits of on-chain finance. Tokenized deposits, backed by bank balance sheets, could provide banks with opportunities to offer global, instant payments in an open-loop system, complementing the existing stablecoin market. The article discusses the differences between tokenized deposits and stablecoins, and emphasizes the need for banks to innovate or risk being bypassed by fintech solutions.

The article discusses the significant opportunity stablecoins present for banks, highlighting how regulatory loopholes can lead to innovation and efficiency in the financial sector. It warns that if banks do not embrace stablecoins and tokenization, they risk losing market relevance to fintech companies and larger banks. The piece emphasizes that stablecoins can enhance financial services by providing real-value solutions beyond mere yield incentives.