[Dallas Fed Economists Analyze: Tokenized Deposits May Weaken U.S. Banks' Lending Capacity]
According to a report by CoinDesk, Dallas Fed economists estimate that tokenized deposits increase depositors' interest rate sensitivity by 10%, reducing U.S. banks' ability to absorb long-term interest rate risks by $700 billion. If 10% of deposits were to flow out prematurely, this capacity would decrease by $580 billion. Instant settlement, smart contracts, and AI agents enable depositors to transfer funds instantly. Banks may respond by raising deposit rates, increasing reserves and U.S. Treasury holdings, or relying on term debt, which could impact credit costs for consumers and businesses.
