The banking industry is moving towards digitalisation, but for many years this process has only taken place at the interface level – mobile applications, electronic signatures, scoring. But all this time, a new industry has been developing outside the familiar system – blockchain, where not only interfaces but also assets themselves are digital.
Back in 2019, HSBC, the world’s largest financial conglomerate, decided to bet on blockchain to optimise currency transactions, “despite the collapse of the token market”. Today, when the token market is clearly not going to disappear, banks are moving to a new level – the mass tokenisation of traditional assets.
With the development of a comprehensive regulatory framework and tokenisation, the foundation is being laid for the next step: transferring lending to blockchain. In other words, whereas banks used to simply ‘digitise’ the loan issuance process, now the loan itself can be digital, in the form of a token stored on a distributed ledger. Let’s talk about this.
What are tokenised loans?
A tokenised loan is a form of borrowing where the borrower’s obligation is represented as a digital token on the blockchain. Essentially, it is a “digitised loan agreement” that exists not as a document in a bank’s database, but as a programmable asset with pre-defined logic: terms, interest rates, maturities and the rights of the parties.
Such loans already exist in a decentralised system (DeFi), where a smart contract acts as a bank. Platforms such as Aave, Compound and MakerDAO allow users to take out and issue loans without intermediaries, relying solely on code and collateral in cryptocurrency.
The mechanism is quite simple, but revolutionary in its essence.
- The borrower deposits collateral – for example, ETH or USDC tokens – into a smart contract. The contract locks in the collateral and automatically issues a “debt token” that reflects the obligation to repay the debt with interest.
- While the loan is open, the contract holds the collateral in an account and accrues interest to the lender. If the collateral falls below a specified level, the contract liquidates the position – it sells the asset and repays the debt without humans.
- This happens transparently, in real time, and is confirmed by the blockchain. The lender sees the status of their funds, while the borrower sees the terms and interest rate, which are dynamically determined based on demand and liquidity.
Now this process is gradually being launched in the banking environment. Technologies that have already been tested in DeFi have demonstrated the viability of digital loans and provided banks with a ready-made model where a loan can exist not as a line item on the balance sheet, but as a token with a history, collateral and automatic control of conditions.
For banks, loan tokenisation offers three key advantages.
- Firstly, transparency: every transaction is recorded in the register, which reduces the risk of errors and fraud.
- Secondly, liquidity: credit tokens can be transferred, split and used as collateral for other transactions.
- Thirdly, automation: smart contracts take the burden off compliance and accounting, reducing transaction processing times from days to minutes.
The difference between the world of DeFi and banks lies solely in the level of regulation and the type of assets: instead of anonymous users and cryptocurrencies, banks work with identified customers and “regular” money. At the same time, the basic form remains the same: tokens as a representation of debt rights and smart contracts as an enforcement mechanism, managed via blockchain but integrated into the banking compliance system.
How banks are integrating blockchain
Large traditional banks are already working on blockchain projects. A couple of examples:
- Deutsche Bank, Germany’s largest bank, is working on launching its own Layer2 network based on the Ethereum network with zkSync technology. Its main task is to combine the advantages of blockchain with regulatory requirements. This is an example of how the bank is not just studying, but building its infrastructure in order to later launch the tokenisation of assets and debt obligations on its basis.
- In June 2025, JPMorgan Chase launched a pilot project for the JPMD token, a deposit token representing dollar deposits on the Base blockchain. It claims that deposit tokens are superior to stablecoins. These are not yet loans, but a blockchain infrastructure agreed upon with the bank.
- In May 2025, one of the world’s largest financial conglomerates, HSBC, allowed tokenised deposits to be issued and transfers between corporate accounts on the blockchain to be made (in experimental mode).
Cryptowallets, like new banks
With the adoption of cryptocurrencies and blockchain solutions, tokenised loans may cease to be the prerogative of specialised platforms alone. In the future, even exchanges and wallets may offer them as a built-in feature of the ecosystem. In the long term, lending = “blockchain function”: tokens, wallets, and smart contracts already contain everything necessary for issuance, accounting, and servicing without intermediaries.
Some wallets – Trustee Plus, MetaMask, OKX – are technically ready for this role:
- On the one hand, they act as a universal interface for interacting with blockchain and tokenised assets.
- On the other hand, they are increasingly implementing compliance, KYC and AML tools, bringing their functionality closer to the requirements of banking infrastructure.
This is how wallets are becoming universal financial hubs, combining the principles of open blockchain and banking reporting standards. Already today, they offer features that go beyond a single world, such as cryptocards. For users, this means access to credit products directly from their digital wallet, and for the market, it means the emergence of a new infrastructure where traditional financial institutions and blockchain services finally merge.
Tokenization transforms lending from a paper-based and fragmented process into a digital, programmable asset. The transition to this format will not be instantaneous: there remain issues of regulation, infrastructure compatibility and trust in the new model. But it is precisely the technological nature of blockchain that makes this transition possible.
The integration of blockchain into the banking system and stock markets will accelerate. And it is quite likely that in about five years, loan tokenisation will become the infrastructure standard for the entire sector. It will be as natural as electronic payments are today.
Ivan Ordenko serves as the Head of Partnerships & Marketing at Trustee Plus, bringing over three years of experience in accelerating business growth, forging strategic B2B partnerships, and scaling marketing initiatives in fast-paced fintech environments. He focuses on developing tailored solutions for teams that require fast mass payouts, transparent payment flows, and seamless integration with crypto-card services.
