The Public Ledger: The Great Financial Rebuild

Hello, Fintech Friends!

The largest US banks are building their own blockchain. JPMorgan, Bank of America, Citi, and Wells Fargo plan to launch a tokenized deposit network in the first half of 2027, operated by The Clearing House, the payments company they co-own.

Tokenized deposits are ordinary bank deposits represented as tokens onchain, so they keep the same credit risk, regulation, and accounting, and the money never leaves the banking system. "This is a big move for the banks," Clearing House CEO David Watson told the WSJ, pointing to a "radically different" future for onchain payments.

Here is the obvious question. Banks already settle with each other over Fedwire. Why build a blockchain to do what they can already do?

Two reasons. First, Fedwire does not run around the clock. It closes on weekends and holidays, and even the planned expansion falls short. Starting no earlier than 2028, the Fed will add Sundays and weekday holidays, moving Fedwire to a Sunday-through-Friday schedule at 22 hours a day. Saturdays stay closed. A tokenized network settles any time, including the nights and weekends when today's rails go dark.

Second, and this is the bigger one, tokenized cash is the missing piece for settling tokenized assets. Fedwire moves money between banks, but settling a stock or bond trade still pulls in custodians, clearinghouses, and other middlemen. Tokenization can collapse that into instant, atomic settlement, where the asset and the cash move together in one step. That only works if the cash itself is a token. No tokenized cash, no tokenized settlement.

Fine, but why would they need to tokenize assets? Today, money moves only during banking hours, so liquidity sits idle nights and weekends. Capital gets trapped waiting for trades to settle, a day for US stocks and two for currencies. In FX, banks often pay out one leg before the other clears, exposing themselves to counterparty risk. Tokenization can solve many of these issues.

This is why I think the next wave of adoption for tokenized deposits and stablecoins won't come from consumers asking for it. It will come from financial institutions using tokenization to solve exactly these problems.

The usual pitch for tokenizing stocks is consumer access. Tokenized US stocks let someone in a market with limited access buy Apple or Nvidia, the same way stablecoins put dollars in reach where they are hard to get. That is real in some places, but it is not where the volume will come from. The more likely path runs through the back office. A broker adopts tokenization to fix its own settlement and funding, and once its settlement runs on tokenized assets, accepting stablecoin deposits and letting customers hold tokenized stocks becomes a small next step.

The banks themselves expect corporations to go first. The Clearing House says early demand will come from large multinationals running treasury operations, liquidity management, and cross-border payments on the network. From there it spreads outward. A company asks its suppliers to accept stablecoins and tokenized deposits. Suppliers use them to pay employees. Employees eventually spend them at merchants, who then have to accept them. Adoption travels down the chain, not up from the consumer.

A tokenized deposit network from the four biggest US banks is the first real signal that it is starting. These are my theories, of course, but imagine they are right. It would mean completely rebuilding the financial backend, and a wave of new companies created to do it.

Honestly, I can't think of anything more exciting to watch.

Jev Kazanins

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p.s.s My views are my own and do not necessarily reflect those of my employer.

Cash App $XYZ ( ▼ 0.69% ) launched Cash App Tags, a line of NFC payment accessories that let customers tap to pay without a phone or card. The first one is the Cash App Wand, a $25 pearlescent wand on a keychain that links to a user's Cash App Card and works anywhere Visa tap to pay is accepted. The first 10,000 units sold out within hours. The product came out of a TikTok trend where people hid tap-to-pay cards inside homemade magic wands. "While physical cards are often buried in wallets, Cash App Tags are just the opposite. We see a unique opportunity here to make payments visible and social," said Thomas Templeton, Block's hardware lead.

A couple of weeks ago I wrote about Jack Dorsey teasing a Cash App hardware product at the J.P. Morgan conference, the one he would only describe as "hardware related" and something users "always see." This is it. Dorsey's argument was that as software becomes "more and more throwaway," a physical product "feels real" and "inspires trust." A $25 wand will not move revenue. The point is brand and customer acquisition, aimed at the Gen Z users Cash App has been courting with teen accounts and a kids' debit card. Apple Pay and Google Pay won the invisible-wallet race years ago. Cash App is going the other way, toward a payment object people can see and show off.

Read more: Introducing Cash App Tags

Nubank $NU ( ▼ 0.13% ) announced its first-ever share buyback. The company will repurchase $1.0 billion of its Class A shares over the next 12 months, funded with surplus cash. Nubank is still investing across Latin America, where it just crossed 15 million customers in Mexico and is approaching 5 million in Colombia. It is also expanding into the US, where it won conditional OCC approval in January for a national bank charter, and investing heavily in AI. Yet it can fund all of that and still return cash to shareholders. "All growth investments across Brazil, Mexico, Colombia and the United States remain fully funded and unchanged," the announcement said.

Nubank can afford all of it because new bets stay small until they work. On the latest earnings call, CEO David Velez said the company invests "a relatively small amount of capital and resources" until it sees product-market fit. The US headwind will be "less than 100 basis points on our consolidated efficiency ratio" in 2026 and 2027, he said, so even a full push barely touches profitability. Mexico is already profitable, moving from a quarterly loss to the "first quarter of IFRS profitability." At $871 million in quarterly net income and a 29% ROE, Nubank makes more cash than it can reinvest, and with the stock down almost 30% this year, buying back shares makes sense.

Read more: Nu Holdings Announces US$1.0 Billion Share Repurchase Program

Nuvei is in advanced talks to buy Payoneer $PAYO ( ▲ 0.08% ) for about $2.7 billion, Reuters reported, an enterprise value near $2.3 billion after Payoneer's cash. Payoneer shares jumped 27%, and a deal could be signed within days, though it could still fall apart. The two sit on opposite ends of a payment. Nuvei helps merchants accept money, while Payoneer sends it out to freelancers, online sellers, and suppliers, with marketplace clients like Amazon, Walmart, and eBay. Payoneer's 2025 revenue rose 8% to $1.05 billion, but net income fell 40% to $73.2 million, with Greater China at 34% of revenue.

The buyer is itself a recent take-private. Nuvei traded on the Nasdaq until 2024, when Advent International bought it for roughly $6.3 billion at a 56% premium. Payoneer would be the biggest deal Nuvei has done since. Advent is running it as a rollup, building a payments company by buying public ones and taking them private. Payoneer is a cheap target, a 2021 SPAC that debuted near a $3.5 billion market cap and had fallen to $1.7 billion before this week.

Read more: Nuvei in advanced talks to acquire payment firm Payoneer