39 US state banking groups form BankChain Alliance for 2027 blockchain launch

Thirty-nine U.S. state bankers associations have formed the BankChain Alliance to develop a bank-owned blockchain network for tokenized deposits, stablecoins, smart payments and automated settlement, with a launch targeted for 2027.

BankChain said in its Aug. 25 announcement that the network will be designed, governed and owned by the banking industry. Banks across the country will be invited to become owners as the group works through its technology selection process.

The alliance has completed the first phase of its request for proposals and is evaluating technology providers. It is also planning an infrastructure that can connect with other financial networks.

Kathy Kraninger, chair of BankChain Alliance and president and CEO of the Florida Bankers Association, said the project is intended to give banks of different sizes a role in building the infrastructure they would use.

“This is about banks of all sizes building their own future,” Kraninger said, describing the planned system as an industry-led network that would serve institutions across rural, regional and urban markets.

The 39 state associations involved in BankChain collectively represent 3,283 banks holding $21.8 trillion in assets, based on Federal Deposit Insurance Corp. call-report data as of March 31, according to the alliance.

Participation, however, currently sits at the association level. BankChain states on its website that individual banks represented by the participating associations have not automatically committed to or joined the planned blockchain network unless separately indicated.

Its member associations cover Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin and Wyoming.

Under the proposed structure, banks would be able to use common blockchain infrastructure for services including tokenized deposits, stablecoins, programmable payments and automated settlement. BankChain also plans to make the network interoperable with other systems, although it has not disclosed the underlying blockchain architecture or technical framework.

A tokenized deposit represents commercial bank money on blockchain infrastructure and remains a liability of the issuing bank. The structure differs from stablecoins issued by nonbank companies, which can use separate reserve and redemption arrangements.

BankChain plans to accommodate both tokenized deposits and stablecoins alongside smart payment functions, giving participating institutions several types of blockchain-based payment instruments on the same planned network.

Ownership forms a central part of BankChain’s proposed structure, although the alliance has not disclosed how much participating banks would be required to invest.

Public materials do not provide figures for committed capital, association contributions, ownership percentages or pricing. American Banker separately reported that BankChain wants to obtain an ownership interest in the technology company ultimately chosen to support the network.

The alliance has already completed the first stage of its request-for-proposals process, Kraninger told the publication.

During that process, regulatory compliance received more weight than any other factor, according to Corey LeBlanc, co-founder and chief technology officer of Locality Bank.

Governance is also being built around participation from state banking organizations. Howard Headlee, president and CEO of the Utah Bankers Association, told American Banker that BankChain is intended to provide member institutions with “equal access to a network they own, where their voice is heard.”

Kraninger chairs a board that also includes executives from state banking groups in Ohio, Nebraska, Texas, North Carolina, Missouri, Utah, New Hampshire and Massachusetts. TekFactor founder Kim Askwith is another member of the board.

Individual banks have yet to be named as owners of the planned network, leaving BankChain to move from association participation toward direct commitments from financial institutions before its targeted 2027 launch.

BankChain is entering a U.S. banking sector where major institutions are separately preparing blockchain infrastructure for commercial bank deposits.

JPMorgan Chase, Citigroup, Bank of America and Wells Fargo are working through The Clearing House on a shared tokenized deposit network targeted for the first half of 2027, according to prior reporting. That project is expected to allow corporate customers to transfer tokenized commercial bank money around the clock while connecting blockchain transactions with established banking infrastructure.

Owned by 25 of the largest U.S. financial institutions, The Clearing House already operates payment networks including RTP and CHIPS and says its systems clear and settle more than $2 trillion every day. Its tokenized deposit project includes support from more than a dozen institutions, including BNY, HSBC, PNC, Santander, TD Bank, Truist and U.S. Bank. Services under consideration include programmable treasury functions, automated payments, liquidity management and cross-border transfers.

No operational launch date beyond the first-half 2027 target has been disclosed, and a technology provider had not been announced when the initiative became public.

BankChain has outlined a different product mix by including stablecoins alongside tokenized deposits, smart payments and automated settlement. Its ownership model is also being organized through state bankers associations and eventual direct participation by banks nationwide.

Wells Fargo, one of the institutions involved with The Clearing House, is also preparing its own tokenized deposit service for corporate and commercial clients. The bank said in August that an initial rollout planned for this fall would support U.S. dollar-to-British pound transactions for selected customers, with the platform designed to handle transfers and settlements outside conventional banking hours. Additional clients, currencies and countries are expected to be introduced throughout 2027 as Wells Fargo expands the service.

Wells Fargo carries an Alpha Score of 60 out of 100, labeled Moderate, based on AlphaScala’s proprietary metrics for the Financials sector. The score reflects a balanced risk-reward profile given the bank’s involvement in multiple tokenized deposit initiatives alongside its core banking operations.

Blockchain-based bank money is also being tested through infrastructure outside the two U.S. consortium projects. SWIFT moved its blockchain ledger into initial deployment in July, with 17 global banks preparing to test tokenized deposit payments across the network. HSBC, Citi, BNP Paribas, UBS, ANZ, DBS and Standard Chartered were among the institutions named in the initial rollout after SWIFT spent nine months developing the system. The ledger is designed to support international payments during weekends and overnight periods while participating banks retain existing compliance, risk-management and control requirements.

Another structure has been tested by Custodia Bank and Vantage Bank, which have developed a token that can function as a bank deposit within their Hazel network and operate as a stablecoin when transferred outside it. The banks disclosed the dual-purpose token model in June after testing the Ethereum-based system from March. Their structure allows participating institutions to retain their customer deposits and control their own wallets while accessing tokenized deposit and payment-stablecoin functions. Custodia and Vantage have been evaluating the platform with banks ahead of a planned fourth-quarter 2026 rollout, with the system intended for institutions including community banks and credit unions.

BankChain has not named the companies competing to become its technology partner or disclosed when testing with individual banks will begin. Its next steps remain the selection of the network’s technology provider and recruitment of banks as owners before the targeted 2027 launch.