JPMorgan Chase and consultants Oliver Wyman took a look at blockchain technology in commercial banking in a report released Feb. 9. Stablecoin and central bank digital currencies (CBDCs) have dominated in this sphere so far, but the authors pointed out the advantages offered by deposit coins for stability and reliability.

Deposit tokens are issued on a blockchain by a depository institution to represent a deposit claim. This contrasts to stablecoins, commonly issued by a non-bank private entity, and CBDCs. This difference in issuer is a key advantage:

“Given that deposit tokens are commercial bank money embodied in a new technical form, they sit comfortably as part of the banking ecosystem, subject to regulation and supervision applicable to commercial banks today.”

Regulation, the report’s authors pointed out, contributes to trust and reduces the risk of a run on deposit tokens, as well as assuring reliability.