Researchers at the Federal Reserve Bank of Dallas, abbreviated as Dallas Fed, indicate that tokenized deposits and real-time blockchain transfers may weaken bank liquidity and limit their ability to issue long-term loans. The study was authored by Rosie Levy and Srini Ramaswamy.

The research points out that of the $7 trillion in term risk borne by U.S. banks, approximately 80% is supported by the term characteristics of traditional deposits. If the weighted average term of deposits shortens by 10%, the banking system’s term transformation capacity will decrease by about $580 billion, potentially increasing liquidity risk and pressure for fund outflows. Chris Turner, co-founder of Kula, stated that the speed of token transfers does not equate to the legal settlement of underlying financial claims. Tokens can be transferred through the blockchain network in seconds, but payments, ownership, and legal claims still rely on banks, custodians, clearing systems, and regulatory registries to complete the settlement.