From Legacy Rails to Blockchain: Why Big Banks Are Betting on Tokenization

• Over fifty percent of the largest 25 U.S. banks are currently experimenting with tokenization, custody, and stablecoin.
• Barclays, JPMorgan and Goldman Sachs are constructing fundamental settlement systems on blockchain rails not merely piloting them.
• As stablecoin volumes have surpassed the 1 trillion mark each month, banks are under pressure to modernise lest they soon become irrelevant

Tokenization is forcing the world’s largest banks to confront an uncomfortable truth — the infrastructure they built their businesses on is aging fast. Payment rails that take days to settle, cross-border transfers loaded with fees, and asset systems with no programmability are starting to look like liabilities. 

Now, from London to New York, major institutions are putting real money and resources into blockchain technology. This is not a trend they are chasing. It is a problem they are trying to solve before someone else solves it for them.

The Cracks in Legacy Infrastructure Are Getting Harder to Ignore

Banks have operated on the same basic settlement logic for decades. A transaction is started, it passes through intermediaries, and it clears — sometimes within hours, sometimes within days. For most of banking history, that was acceptable. It is becoming less so.

The rise of digital-native financial services has changed what clients expect. Businesses moving money across borders want speed and cost transparency. Institutional investors want assets that can be transferred or fractionalized without lengthy back-office processes. Legacy systems were simply not designed to meet those demands.

A BitGo report from February 27 found that more than half of the twenty-five largest U.S. banks are already running digital asset trials. 

Custody, tokenization, and stablecoin use are the main focus areas. That level of activity across the top tier of U.S. banking is not experimentation anymore — it reflects a genuine search for better infrastructure.

The Industry Is Moving, Not Just Talking

Barclays made headlines recently when it emerged the bank had sent a request for information to technology providers about building a blockchain platform. 

Payments and deposits are the target areas, with stablecoins and tokenized deposits both under consideration. The bank is aiming to select providers by April, which is a tight timeline for a project of this scale.

What makes this notable is the company Barclays finds itself in. JPMorgan has already built Kinexys, a platform that embeds tokenization into payment and financial messaging workflows that institutions use every day. 

Societe Generale has pushed ahead with tokenized bonds and stablecoin infrastructure across Europe. Each of the four firms, Goldman Sachs, UBS, Citigroup and BNY Mellon has opened or extended their own programs addressing deposits, funds, commercial papers as well as personal-market assets.

This, combined, is a coordinated change in some of the most influential financial institutions in the world. Each is building toward a version of capital markets where assets move on-chain, ownership is programmable, and settlement happens in real time rather than on a two-day lag.

The Build-Out Is Already Underway

What separates this moment from earlier blockchain hype cycles is that the infrastructure is actually being built. Banks are not running isolated proofs of concept anymore. They are redesigning core systems — issuance, settlement, asset servicing — from the ground up with blockchain architecture in mind.

Citi’s token services platform is targeting continuous settlement and liquidity management, going after one of the oldest frustrations in institutional finance. 

The Canton Network is giving regulated entities a way to transact on shared ledgers without exposing confidential data to counterparties. Chainlink is handling interoperability, allowing tokenized assets to move across different blockchain systems without breaking down at the seams.

IBM is building out digital asset management tools that cover the full lifecycle of tokenized securities across multiple chains. Oracle-backed solutions are working their way into financial workflows banks already rely on. The technology layer is maturing quickly, and banks are no longer waiting for it to be perfect before committing.

Regulation Removed the Last Major Excuse

For years, regulatory uncertainty gave cautious institutions a easy reason to hold back. That cover is largely gone. In 2025, the United States passed the GENIUS Act establishing a legal avenue to allow banks as well as non-bank issuers to issue regulated stablecoins. 

Lawmakers in Congress agreed on the CLARITY Act to formally define digital commodities and securities, eliminating a old grey area in U.S. financial regulation.

Overseas, the picture is similar. The European Union is rolling out its Markets in Crypto-Assets framework across all member states: bringing rules under one system with a single, consistent guidelines.

Hong Kong and Singapore have raised their licensing standards for exchanges and custody providers. The United Kingdom is folding crypto regulation into its mainstream financial rules.

Against that backdrop, the market numbers speak for themselves. Stablecoin transaction volumes have crossed one trillion dollars per month — figures that put them in the same conversation as traditional payment networks. 

Tokenized assets could reach $23 trillion by 2033. After years of questioning blockchain’s role in serious finance, banks now race to secure their position before it becomes the default infrastructure.

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