Columbia Business School professor Lev Menand ($N/A) has raised concerns about the slow progress of tokenized bank deposits. His remarks, highlighting tokenized bank deposits doubts, come amid waning enthusiasm and mounting regulatory caution in 2025’s evolving digital asset landscape. The question now is whether the touted benefits of blockchain-based deposits have been overstated.
Columbia Professor Reports 80% Drop in Tokenized Deposit Volume
Professor Menand, a well-known expert on financial innovation at Columbia, revealed that tokenized bank deposits have seen an 80% collapse in value since early 2024. Based on data from The Block Research and S&P Global, total tokenized deposit volume fell from $2.4 billion in March 2024 to just $480 million by October 2025. Major institutions, including JPMorgan Chase ($JPM) and Citigroup ($C), have scaled back their pilot programs. They cited weak commercial demand and uncertain profitability. Reuters filings from September 2025 confirm these cutbacks, reinforcing growing skepticism across the financial sector.
Why Tokenized Bank Deposits Doubts Are Spreading
The underperformance of tokenized deposit pilots has shaken confidence in both the crypto and traditional banking sectors. Fewer banks are experimenting with blockchain settlement tools—only 11% of the top 50 U.S. institutions reported active tokenization projects in Q3 2025, down from 18% a year earlier (American Bankers Association). This slowdown coincides with a 6.2% year-to-date decline in the KBW Nasdaq Financial Technology Index, according to Bloomberg data.
Regulatory uncertainty and a lack of interoperability standards are central to the problem. These issues have driven sell-offs in blockchain-related equities and discouraged new venture funding. Analysts tracking cryptocurrency market trends warn that the tokenization slowdown could signal a maturing phase rather than an outright failure.
How Investors Can Navigate Tokenized Deposit Volatility
For investors exposed to blockchain and fintech sectors, Menand’s warnings highlight the need for careful positioning. Shareholders in large banks such as JPMorgan ($JPM) and Citigroup ($C) should watch for further disclosures on digital asset trials. Crypto-focused investors may face near-term volatility, while fintech ETF holders like ARK Fintech Innovation ETF ($ARKF) could see slower performance if adoption stalls.
Prudent strategies include diversifying into traditional financial technology firms or monitoring U.S. Office of the Comptroller of the Currency (OCC) updates, as noted in the latest financial news. For more sector insight, review cryptocurrency market trends for indicators of renewed institutional engagement.
Analysts’ Outlook: Can Tokenized Deposits Recover?
Market researchers point out that early enthusiasm for tokenized bank deposits has cooled due to complex regulations and fragmented systems. The Financial Stability Board’s September 2025 report predicts that widespread adoption could remain limited until 2026 unless banks and regulators standardize compliance protocols. Still, analysts note that progress in pilot testing or cross-border partnerships could reignite optimism if tangible results emerge.
Tokenized Bank Deposits Doubts Define a 2025 Inflection Point
With Columbia’s Professor Menand now spotlighting tokenized bank deposits doubts, investors and policymakers face a pivotal year. Key developments to monitor include new pilot programs, interoperability breakthroughs, and regulatory clarity from U.S. and global agencies. For now, the sector stands at a crossroads—balancing innovation potential against structural headwinds that could delay mainstream adoption.
Tags: tokenized deposits, blockchain, Columbia Business School, $JPM, cryptocurrency
