The Dallas Federal Reserve has warned that tokenized deposits could reduce U.S. banks’ lending capacity by as much as $700 billion. The concern centers on programmable deposits and artificial-intelligence agents that could allow customers to move funds between banks instantly and automatically in search of higher yields. Faster switching may make bank deposits more sensitive to changes in offered returns, increasing competition for funding. As a result, banks could face higher funding costs, potentially limiting the amount of credit they can extend. The warning highlights a possible financial impact from the development of tokenized deposit systems, which can be programmed to execute transactions under defined conditions. The issue is relevant to digital-asset markets because tokenized deposits connect blockchain-based functionality with traditional bank funding. The Dallas Fed’s assessment was reported by CoinDesk on August 26, 2026.
