Tokenized Deposits Cut Counterparty Risk, Deposit Coin Founder Says

Von Girsewald, who spent decades in traditional finance at Deutsche Bank before moving into fintech, made the remarks in an interview with Sandmark at the Bermuda Digital Finance Forum. The gathering brought together players from traditional and decentralized finance to discuss digital assets, artificial intelligence and regulation.

"Stablecoins create complexity"

"Stablecoins are excellent rails," von Girsewald said. "They sit on top of the traditional infrastructure. You have the stablecoin sandwich: your on-ramp, you move, and your off-ramp. Basically, that's a very efficient way to move money. It's a perfect rail, particularly for cross-border transactions."

He continued: "With all of the different stablecoins that are out there – payment stablecoins – they require a lot of orchestration. They require the on- and off-ramping, and that basically creates complexity. Complexity creates counterparty risk, and complexity eventually can even create systemic risk."

Multi-bank approach differs

Deposit Coin Inc. acts as an infrastructure provider rather than an issuer. Its technology enables US-licenced issuers to produce permissionless, fully fungible tokenized deposits that represent actual bank holdings across multiple banks. These function as direct liabilities of regulated banks, backed by Federal Deposit Insurance Corporation (FDIC) insurance and capable of paying interest.

"At Deposit Coin, we're not an issuer. We are just an infrastructure company," von Girsewald said. "What we have solved is basically a way to issue a token to a US-licenced issuer that is bank-agnostic in a way that that token can represent deposits at multiple banks. That token is permissionless, and it's fully fungible."

This differs from single-bank offerings such as J.P. Morgan's JPM Coin, a tokenized deposit on the Base blockchain network limited largely to the J.P. Morgan ecosystem. "The problem with that is that it only works within the J.P. Morgan world," he said.

Regulatory tailwinds build

Von Girsewald noted supportive signals from regulators, including the FDIC. "Chairman [Travis] Hill has said that a tokenized deposit is still a deposit onchain." He added that recent FDIC guidance under the GENIUS Act also addresses tokenized deposits.

For investors, the structure offers reduced counterparty risk for corporate treasuries because funds remain direct claims on FDIC-insured banks rather than on non-bank issuers holding reserves.

FDIC insurance reduces risk

"If you take all of this together – FDIC-insured, interest-bearing, it can't be pegged because a dollar is a dollar – it is basically a true digital dollar," von Girsewald said. On blockchain risks, he added: "I don't think that there is a lot of risk involved in that... Here you have a claim against the bank that is insured by the government, by the FDIC."

As a startup, Deposit Coin Inc. has completed a proof of concept, obtained a legal opinion confirming regulatory alignment, and secured letters of intent from two banks. It is in discussions with "global systemically important banks" as well as US regional banks. Von Girsewald described it as primarily a US-focused product.