With the GENIUS Act now law, U.S. banks are expected to increasingly explore issuing blockchain-based assets. While many tout stablecoins for faster, cheaper payments, most banks are actually eyeing tokenized deposits — not stablecoins — as the more viable product. Though both are digital tokens tied to fiat value, their nature and implications differ greatly. Stablecoins (like USDC) are backed 1:1 by cash or equivalents, circulate on public blockchains, and are used broadly as money for trade, savings, and remittances. Tokenized deposits, by contrast, are representations of client bank deposits, issued and moved within a bank’s private network, with value transfers still tied to bank-controlled ledgers. Unlike stablecoins, they’re non-fungible across institutions and don’t circulate freely. Their purpose is to modernize existing bank services, not create new monetary systems. The difference lies in function and intent: stablecoins are a new form of money, while deposit tokens are tools for enhancing traditional banking. As banks increasingly mention blockchain innovations, it’s vital to distinguish between the two.