Dallas Fed Economists Warn Tokenized Deposits Could Increase US Credit Costs

Tokenized deposits could make bank funding less stable and raise borrowing costs in the United States, according to economists at the Federal Reserve Bank of Dallas, as reported by Cointelegraph. The economists said deposits that can move more quickly and operate through programmable systems may increase the risk of funding volatility for lenders. If banks face less stable deposit funding, they could turn to alternative sources of financing that carry higher costs. That pressure could ultimately feed into the cost of credit for borrowers. The comments focus on the potential effects of tokenized deposits on banking-sector funding rather than on any specific cryptocurrency or digital asset. Assets listed in connection with the report include Aster (ASTER), Lorenzo Protocol (BANK), ORE (ORE), and STABLE (STABLE), although the supplied information does not state that the Dallas Fed analysis directly covers these assets.