Working paper — Perspectives · Digital Money · September 2026. Co-authored with John D’Agostino. A condensed version of the argument ran as commentary in Fortune on September 12, 2026.
In brief. Banks can win the fight for the deposit and still lose the depositor. The deposit is the first link in a chain that ends in the client relationship and its revenue — and the larger risk is the client who never arrives, because digital-native businesses now start on fintech rails. No single-rail bet is warranted: tokenized deposits lead on real payment volume, stablecoins on reach. The answer is to buy the rails, build the intelligence, and own the relationship.
Written for the boards and executive teams of community and regional banks, and for the technology and treasury leaders who serve them. It argues a position rather than surveying the field, and it says where the argument is unsettled.
Five things to take from this paper
- Most banks are asking the wrong question. “Which digital dollar wins?” misses the larger risk. The better questions: what should the bank own, what should it connect to, and why is waiting the real risk?
- A bank can win the deposit and still lose the depositor. The deposit is the first link in a chain — transactions, treasury workflow, data, the relationship, credit, FX, card and merchant revenue. Whoever owns the interface owns what follows.
- The larger risk is the client who never arrives. Digital-native businesses build their financial stack on fintech rails at inception, and fintechs are becoming chartered competitors with bank economics.
- No single-rail bet is warranted. Tokenized deposits lead on real payment volume today; stablecoins have solved reach and availability ahead of scale. The networks do not yet talk to each other, and convergence is under way.
- Buy the rails, build the intelligence, own the relationship. Favor connectivity over custody, partner across industries rather than only across banks, and move in stages — quickly enough that no one else becomes the client’s financial operating platform first.
A tokenized-deposit strategy protects the product. A multi-rail strategy protects the client relationship.
Read the paper (PDF, 12 pages) →
This paper expands the July 2026 essay Banks may preserve the deposit and lose the depositor.
Views are the authors’ own and do not represent their employers or affiliated organizations. Market figures are as of mid-2026 and are cited in the paper’s notes.